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Home My WebLink About1991-04-18~ COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA P.O. BOX 8127, FOUNTAIN VALLEY. CALIFORNIA 92728-8127 10844 ELLIS, FOUNTAIN VALLEY, CALIFORNIA 92708-7018 (714) 962-2411 April 11, 1991 NOTICE OF ADJOURNED REGULAR MEETING DISTRICT NO. 7 THURSDAYJ APRIL 18~ 1991 -7:30 P.M. TUSTIN PRESBYTERIAN CHURCH 225 West Main Street TustinJ California <See enclosed location map) Pursuant to adjournment of the regular meeting of April 10, 1991, the Board of Directors of County Sanitation District No. 7 will meet in an adjourned regular meeting at the above hour and date. C),:~~ secetary 1.661. '81. 11Hd''1 'A'10SHnH.l 'wd oc:.L ~NIH'13H Jl1Bnd .l# .lJIH.lSIO NOl.l'1.llN'1S A.lNnOJ .. > Cll > 0 .,, z > ~ AB.ii >Zii i OLZ OOZ "' ,.. • 8 JID DD ] is g~ _____ z_•_LL_.• ~ 000 [~00• l .. N 101 101 l 0 0 ~ Hl9 Q .J..S Nl"W DODD~ D I ; I ·a NZ D ~ Cll ;-i (/) "' ..... ,.... 00( OO• OOll z ~ ~ 0 :lD c :Ill ~ z Ill iJ ,.. : en > 0 "' z ,. I z ~ ~ 0 ::0 -t . /IJI J:>ll N1 t i BOARDS OF DIRECTORS County sanitation Districts of Orange County, California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728-8127 Telephone: (714) 962-2411 ( 1 ) Roll call DISTRICT NO. 7 ADJOURNED REGULAR MEETING THURSDAY~ APRIL 18; 1991 -7:30 P.M. TUSTIN PRESBYTERIAN CHURCH 225 West Main .Street Tustin~ California AGENDA (2) Public Comments: All persons wishing to address the Board on the subject of this hearing should complete the "Request to Present oral comments" form (pink form) and submit to the Board Secretary prior to the beginning of the meeting. As determined by the Chairman, speakers• remarks may be limited to five minutes. (3) (a) Public Hearing on proposal to collect adopted annual sewer service charges on the property tax bills and on the Sewer Service Charge Report for Fiscal Year 1991-92, pursuant to Ordinance No. 725: (1) Open hearing (2) Verbal staff report on proposed use of the County of Orange property tax bill for collection of the annual sewer service charge. (3) Consideration of motion to receive and file written staff Sewer Service Charge Report for Fiscal Year 1991-92. See page "A" (4) Consideration of motion to receive and file written comments received, if any (Copies enclosed with Directors• agenda material). (5) Oral public comment (6) staff/Board response to oral comments (7) Close hearing (b) Consideration of motion to adopt a finding that a majority of the owners of property have/have not protested · [ITEM (3) CONTINUED ON PAGE 2] DISTRICT 7 4/18/91 (3) [CONTINUED FROM PAGE l] ( c) C.d) Consideration of adoption of County Sanitation District No. 7 Sewer Service Charge Report for Fiscal Year 1991-92 Consideration of Resolution No. 91-64-7, directing the County Auditor-Controller to include sewer service charges on the property tax bills, pursuant to Ordinance No. 725 of County Sanitation District No. 7 of Orange County, commencing with the 1991-92 fiscal year. See page "B" (4) Other business and communications, if any (5) Consideration of motion to adjourn -2- t u ~-v April 4, 1991 COUNTY SANITATION DISTRICTS of ORANGE COUNTY. CALIFORNIA 10844 ELLIS AVENUE P.O. BOX 8127 FOUNTAIN VALLEY, CALIFORNIA 92728-9127 COUNTY SANITATION DISTRICT NO. 7 (7141962-241, SEWER SERVICE CHARGE REPORT FOR FISCAL YEAR 1991-92 This report is prepared pursuant to the requirements of California Health and Safety Code Section 5473. County Sanitation District No. 7 is responsible for the collection, treatment and disposal of wastewater generated within its boundaries. These services are essential to the protection of the health and safety of the public served by the system. District No. 7 revenues from ad valorem taxes on real property decreased significantly after passage of Proposition 13 in 1978. Future tax revenue, estimated in reports on file in the office of the Secretary of the District, will be insufficient to provide the funding necessary to operate, maintain and rehabilitate the sewerage system. Therefore, a long-range financial program, including a sewer service charge, has b~en adopted by ordinance of the District to supplement the District's revenue sources in the upcoming fiscal years. The Board of Directors of County Sanitation District No. 7 proposes consideration of a resolution authorizing billing and collection of its annual sewer service charges as set forth in Table A of Ordinance No. 725, An Ordinance of the Board of Directors of County Sanitation District No. 7 of Orange County, California on the 1990-91 County of Orange property tax bills. The purpose of this charge is to pay for sanitary sewer services provided by the District to be charged to the respective parcels of improved property within the territorial jurisdiction of the District. This report contains a description of each parcel of real property that will receive the services of the District and have access to utilization of the facilities, said parcels of real property being described by reference to maps prepared in accordance with Section 327 of the California Revenue and Taxation Code and on file in the office of the County Assessor, which maps are hereby incorporated herein by reference. The ordinance established the annual fee to provide revenues that shall be used only for the acquisition, construction, reconstruction, maintenance, operation and rehabilitation of sanitary sewer facilities, and shall not be used for the acquisition, construction or maintenance of new local street sewers or laterals as distinguished from main trunk, interceptor and outfall sewers provided by the District. The approved sewer service charge for fiscal year 1991-92 to be assessed against each user of the District's sewerage system based on the user's public property type is set forth in Table A attached hereto. Said table also sets forth exception provisions. The 1991-92 charge for each parcel based on the last equalized assessment roll can be determined from the computer printouts on file in the office of the Secretary of the District. II A-1" AGENDA ITEM #(3)(a)(3) II A-1" District No. 7 Sewer Service Charge Report Page 2 If the proposed resolution is adopted, the Board of Directors will direct the County Auditor-Controller to have such charges for the forthcoming fiscal year collected on the tax roll in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the District and the County of Orange. At the time and place stated in the notice setting the public hearing on this report, the governing Board of Directors shall hear and consider all objections or protests, if any, to said report referred to in said notice, and may continue the hearing from time to time. GGS:lc REF:DIST.INF91/DIST7.l.2 "A-2" AGENDA ITEM #(3)(a)(3) .... '· v u .,,,,-.... "A-2" Class of User Single-Family Dwelling Multi-Family Dwellings/Mobile Homes/Apartments Commercial/ Industrial/Other (government buildings, utilities, non-profit organizations, etc.) ATTACHMENT 1 TABLE A Basis of Charge Charge per dwelling unit Charge per dwelling unit Charge per 1000 square fee of building 1991-92 Annual Rate $40.00 24.00 28.60 In recognition that certain legal parcels of real property exist within the District which are not connected to the District system and that other properties acquire considerably greater potable water than is ultimately discharged to the District's system it is the intent of the District that said parcels be exempt totally or in part from the payment of charges as prescribed herein. Any property owner may appeal the assessment of the charges and submit a claim for rebate to the District ·on the forms prescribed and provided by the District within one hundred twenty (120) days after the annual property tax bills are mailed by the Orange County Tax Collector •. All applications for rebate of an assessment will be determined by the General Manager of the District, or the Finance Director of the District as his designee, who may grant a partial or full rebate or adjustment of the charge based on receiving satisfactory proof that an inequity exists between the amount or assessment and the amount of wastewater discharged to the District's system. Such inequities may include, but are not limited to: "A-3" a) no service connection to the District system exists from the parcel assessed b) principal water use is agricultural c) any other use wherein the amount of wastewater discharged to the District's system is significantly less on a regular basis than the amount of potable water received as measured by the meter on the property. AGENDA ITEM #C3><a>C3) "A-3" ATTACHMENT 1 Page 2 Pursuant to the authority granted by California Health and Safety Code Section 5473, all charges established herein shall be collected on the County Tax Roll in the same manner, by the same persons and at the same time as, together with and not separately from, its general taxes. In the event District determines that errors or inequities exist in the amount of charges to be collected by the County Tax Collector, District may submit a bill for any difference directly to the property owner. Said invoiced amount shall be due and payable within thirty (30) days of invoice date. A credit shall be allowed to all dischargers permitted pursuant to Article 3 of Ordinance No. 722 for the annual sanitary sewer service charge established by this Ordinance in the same manner as credit is allowed for ad valorem taxes pursuant to section 302.6, 303.6 and 304.6 of Ordinance No. 722. II A-4" AGENDA ITEM #(3)(a)C3) -- u "A-4" \~ ATTACHMENT 2 1991-92 Use Fee District No. 7 The Sanitation Districts use the County Assessor's database to determine the amount of sewer use fees that will be assessed each year and to place the charge for each parcel on the property tax bill. The Assessor prepared preliminary use fee reports and mailing labels for District No. 7 using conservatively estimated rates from the 1990-91 budget process. Subsequently, the District No. 7 Board of Directors adopted lower rates, but revised reports could not be prepared. In order to determine the actual 1991-92 supplemental user fee for a specific parcel, the following conversion must be made: Property Code Property Type Reported Fee Adopted Fee 0 Mobile Home $39.00 $24.00 1 Single-Fam. Res. 65.00 40.00 2 Multi-Fam. Res. 39.00/Unit 24.00/Unit 3 Conunercial 46.00/1000 sq.ft. 28.60/1000 sq.ft. 4 Industrial 46.00/1000 sq.ft. 28.60/1000 sq.ft. 5 Rural 65.00 40.00 6 Miscellaneous 46.00/1000 sq.ft. 28.60/1000 sq.ft. 7 Tax Exempt 46.00/1000 sq.ft. 28.~0/1000 sq.ft. 8 Other 46.00/1000 sq.ft. 28.60/1000 sq.ft. "A-5" AGENDA ITEM #(3)(a)(3) "A-5" '~B-1" RESOLUTION NO. 91-64-7 DIRECTING COUNTY AUDITOR-CONTROLLER TO COLLECT SEWER SERVICE CHARGES ON 1991-92 PROPERTY TAX BILLS A RESOLUTION OF THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 7 OF ORANGE COUNTY, CALIFORNIA, DIRECTING THE COUNTY AUDITOR-CONTROLLER TO INCLUDE SEWER SERVICE CHARGES ON THE 1991-92 PROPERTY TAX BILLS * * * * * * * * * * * * * * WHEREAS, the Board of Directors of County Sanitation District No. 7 has heretofore adopted Ordinance No. 725, An Ordinance of the Board of Directors of County Sanitation District No. 7 of Orange County, California, Establishing Sanitary Sewer Service Charges; and, WHEREAS, California Health & Safety Code Section 5473 provides that such charges, as adopted by District Ordinances, may be collected on the County tax roll in the same manner, by the same persons, and at the same time as, together with and not separate from, its general taxes. NOW, THEREFORE, the Board of Directors of County Sanitation District No. 7 of Orange County, California. DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. That pursuant to California Health & Safety Code Section 5473, the County Auditor-Controller is hereby ordered and directed to include sewer service charges, as established by Ordinance No. 725, on the 1991-92 property tax bills in the same manner, by the same persons, and at the same time as, together with and not separate from, the general taxes; and that such sewer service charges be included in the annual property tax bills for each year thereafter, for so long as the rates do not change and this resolution remains in effect; and, Section 2. That pursuant to California Health & Safety Code Section 5473, AGENDA ITEM #(3)(d) "B-1" "B-2" this resolution shall remain in full force and effect until amended or repealed or until such time as the rate of sewer service charges, as established by Ordinance No. 725, is changed; and, Section 3. That the General Manager be, and is hereby, authorized and directed to execute any necessary documents or agreements to effect the order set forth in Section 1 herein. PASSED AND ADOPTED at an adjourned regular meeting held April 18, 1991. AGENDA ITEM #(3)(d) ~ .,. v v v "B-2" f • 1 MANAGER'S AGENDA REPORT County Sanitation Districts of Orange County, California DISTRICT NO. _1 __ P.O . Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728-8127 Telephone: (714) 962-2411 MANAGER'S REPORT TO DISTRICT NO. 7 DIRECTORS MEETING DATE: THURSDAY, APRIL 18, 1991 -7:30 P.M. Tustin Presbyterian Church Fellowship Hall 225 West Main Street Tustin, California Item No. 3: Public Hearing on proposal to collect the adopted annual sewer service charges on the County of Orange property tax bills; and 1991-92 Sewer Service Charge Report. Purpose: The purpose of this hearing is to consider use of the property tax bill for collection of the District's annual sewer service charge, and to adopt the 1991-92 Annual Sewer Service Charge Report. The hearing is not intended to consider the sewer service charge itself, as it was adopted following a separate hearing on February 13, 1991. Background: The District's cost of providing sewerage service to the community has been escalating rapidly because of inflation and increasingly stringent federal, state and local laws and regulations for assuring protection of the environment and the public health and safety. In Fiscal 1992-93, property tax revenues and other existing revenue sources were projected to be insufficient to meet the District's funding requirements. Due to insufficient tax revenues, by the end of 1992-93 the projected shortfall to meet the District's operating expenses and maintain the solvency of the fund would have reached $2.9 million, increasing to $21.6 million by the year 2000. Therefore, after considerable study of the District's long-range funding requirements, the Board adopted a long-range financial program to avoid projected revenue shortfalls and provide the necessary income required to finance the District's rising operating expenses, as well as major capital expenditures for construction of master-planned treatment facilities. The plan basically provides for funding of capital requirements by a combination of sewer .connection fees on new development and issuance of debt; and operating requirements by a combination of annual sewer service charges coupled with continued use of the ad valorem taxes allocated pursuant to Proposition 13. Since then the following fee schedules have been adopted by the Board to fund the District's requirements: One-time Connection Fee: Residential Property Commercial, Industrial & Governmental Property -1- $2,350/Dwelling Unit $ 470/1,000 Sq. Ft. Manager's Report to District No. 7 Directors The one-time connection fee, paid by developers and used to build facilities to serve new development, is collected for the District by the cities when building permits are issued, and the cities retain 53 for their serv ices. Annual User Fee: Single-Family Residence Multi-Family Residence/Mobile Home Conmercial $ 40.00 24.00 28.60/1,000 Sq. Ft. 28.60/1,000 Sq. Ft. 28.60/1,000 Sq. Ft. Industrial Governmental The annual sewer service charge was adopted by the Board in February, effective July 1, 1991, to provide the necessary additional funding for District's ongoing operation and for debt service as reconmended in the 30-year Wastewater Management Action Plan approved by the Boards in July, 1989. (Copies of the staff report considered by the Board when implementing the sewer service charge are enclosed with this report for additional background information. Also enclosed is a copy of Ordinance 725 fixing the user fees.) Proposal to Collect Annual Sewer Service Charge on Property Tax Bill : The staff has identified and evaluated the following three methods of billing and collecting the annual sewer service charge to be used to pay for O & M: -direct billing and collection by the District -placement of the user fee as a separate line item on a water bill and remittance to the District of the fees collected by the water purveyor -placement of the sewer use fee as a separate line item on the County of Orange property tax bill and remittance to the District of the fees collected by the County. Placement of the user fee as a separate line item on the County of Orange property tax bill is significantly less expensive than the other two available methods as indicated in the following table: Annual Billing/ Total Total Bi 11 i ng & One-Time Processing First-Year Five-Year Collection Method Setup Costs Collection Costs Costs Costs 1. District billing/ $157,100 $ 92,100 $249,200 $ 617,600 collection method 2. Water utility 157,100 232,500 389,600 1,319,600 bill method 3. County property 142,600 11, 700 154,300 201,100 tax bi 11 method -2- t Manager's Report to District No. 7 Directors Alternative No. 3, use of the County of Orange property tax bill method, is clearly the most cost-effective of the three methods. Districts Nos. 1, 2 , 3 , 5, 6, 11 and 13 have already adopted this method for billing their user fees, and it has proven to be quite effective in minimizing administrative costs for billing and collecting fees in these seven Districts. California Health and Safety Code Section 5473.1 requires that a District considering collection of its annual sewer service charges on the property tax bills must notify all property owners in the District and hold a public hearing to consider any objections or protests to the proposed collection method. It is not a public hearing on the fee itself , as that has previo usly been fi xed by Ordinance No. 725 adopted on February 13, 1991, but is one of the final steps to be taken by District No. 7 to implement its long-range financing program to fu nd ongoing operat i ons and maintenance costs. In late February and early March, 41,165 notices of the hearing (copy enclosed ) were sent to property owners . We have received appro ximately 39 phone calls and 29 written conmunications from property owners since the notice was mailed. On March 21st, workshops on the proposal were conducted by staff in Tustin. A total of 10 citizens attended and asked questions. Staff will elaborate on the conments of these residents at the hearing. Although the purpose of the hearing is to receive public conmentary on the proposal to collect the annual user fee on the tax bill, not t he fee itse l f, we expect that many citizens attending the hearing will wish to conment on the user fee. Staff will , therefore, present an oral report at the hearing briefly describing the District's activities and outlining the background and financial position of the District, as well as addressing the reasons for the proposed billing and collect i on method. The items appearing on the agenda are the actions required to conmence collect i ng the District's annual user fee on the property tax bill beginning in 1991-92. JWS:sc Enclosures: Notice of Hearing Staff Report dated 10/30/90 Ordinance 725 -3- October 30, 1990 PURPOSE STAFF REPORI' Ipnq-Ranae Financial Plan and Implenentation of User Fee Program COUNTY SANITATION DISTRICTS of ORANGE COUNTY, CALIFORNIA 10944 ELLIS AVENUE P.O. BOX 9127 FOUNTAIN VALLEY, CALIFORNIA 92729-8127 '714) 962-2411 The District No. 7 Board has previously declared its intent to inplemant a supplemental user fee program effective with the 1991-92 fiscal year to provide the necessary lonq-range funding to pay the rising costs of increasingly stringent wastewater treatm:mt and disposal standards of state and federal regulatmy authorities, and to maintain the District's financial integrity. The purpose of this report is to sunmarize the actions taken to date and the remaining steps required to inplenent the District's supplenental user fee program effective.July 1, 1991. BACKGROUND For many years the Districts, as part of the annual budgeta:cy process, have forecast revenues and expenditures on a five-year basis, and since 1986 have forecast for a ten-year horizon. The purpose of this long-range financial planning is to assure adequate funding to cany out the Districts' wastewater managenent program for the benefit of the cama.mities and the nearly two million citizens which the Districts serve in netropolitan Orange County. A major benefit of the long-range cash flCM projections is that tjley enable us to detem:ine well in advance when revenue shortfalls will begin to occur so that the Board of Directors will have adequate time to consider altemative funding sources and take the necessary corrective action to ensure each District's financial integrity. For saie time, our projections have indicated that funding shortfalls in District No. 7 would begin to occur in the early 1990's and that the District would have to consider additional revenue souroes to meet long-tezm funding requirenents for sewerage facilities inprovements and expansion, and ongoing operations and naintenance costs. Property taxes have historically been the major source of local financing of the District's activities. However, the costs of providing service continue to rise beyond the ability of the property tax apportiorments to keep pace because of the stringent requireuents of the federal and state regulatory agencies for advanced wastewater treablent and disposal, new air quality requirenents, and the need to provide additional capacity to meet the increasing demands on the sewerage system. October 30, 1990 Page Two The District has the following options available to finance its facilities inprovenents and expansion activities and ongoing operations and maintenance (O&M) costs: Funding Reguirenent Ongoing collection system and joint trea'blent/disposal facilities operations and maintenance including rehabilitation Capital facilities - and expansion projects Souroe of Funds -Historical share of 1% ad valorem property tax levy -User fees: non-industrial dischargers -User fees: industrial dischargers -Debt financing (bonds/certificates of participation, SRF loans) -Capital reserve funds (existing) -Connection fees on new developnent -Capital replaceuent/inprovenent fees: non-industrial dischargers -Capital repl.acenent/inprovenent fees: industrial dischargers In 1989 and 1990 the Boani reviewed its long-range financial plan for financing its capital and O&M costs and took the following actions: Approved Ipng-Ranae Financial Plan As part of the 30-year "2020 VISIOO" action/master plan adopted by the Directors in July 1989, the Boal:ds approved a long-range plan for financing Districts' activities. Operations and Maintenance Financing Directed the staff to proceed with planning for inplementation of a user fee pmgrcmt to supplenent property taxes and to be collected on the property tax bill beginning in 1991-92. Capital Financing Increased connection fee schedules throughout the District to $2,280/msidential dwelling unit and $460/1,000 sq. ft. for ccmne.JX::ial and industrial property effective July 1, 1990, to fund facilities expansion. Inplemented debt financing progrmn utilizing certificates of participation to fund facilities -and rehabilitation. (Note: First issue in the aIIDUilt of $9,810,000 in December 1990.) PBOPCSED USER EBE P.ROORAM EOR OPERATIONS AND MAIN11ENAla ~DG The user fee program is required to avoid deficits in the operating fund. Attached Schedule A, statement of Projected Cash Flow, was considered as part of the 1990-91 budget process. The schedule includes user fees for operations and maintenance and new borrowing for capital needs as recamended by the 30-year "2020 VISIC!'I" Financial Plan. ' ' ' .~ v ~,,---....., v -·---v- October 30, 1990 Page Thi:ee ~ At that time user fees were estimated to begin at $65. 00 per year for a single family residence and to escalate to $140.00 per year ·by 1999-2000. Without the user fees the operating fund was projected to have a deficit of $2, 865, 000 by 1993 increasing to $21,618,000 by 1999-2000. Revisions to SC11e budgeted estimates and refinements of the user data base are reflected on Schedule B. The latest data base infannation fran the County Assessor reflects a significantly greater mmi>er of equivalent dwelling units than originally estimated. Therefore, current estimates indicate that a user fee of $40 per year for a single family residence for 1991-92 with gradual increases to $90 per year for 1999-2000 will be sufficient to m:U.nta.in mini.nmn cash balances in the operating fund, based on the best infcmna.tion available today. To provide the necessacy revemies for District operating costs (including capital replacement) I staff is proposing to proceed with planning and inplementation of the user fee program as set forth below in Table 1. Attached Schedule C reflects the timetable for the .lllplementation plan. 'mmB 1 DISTRICI' ?«>. 7 P.ROPCEm USER EBE PROGRAM Class of User Single-Family Dwellinqs/Condani.nimns camemi.al/Industri.al/ other Basis of Charge Annual Charge per Dwelling Unit Annual Charge per Dwelling Unit Annual Charge per 1,000 Sq. Ft. of Building Recamended Annual Charge Effective July, 1991 $40.00 $24.00 $28.60 The basis of the charge and the relationships in this three-tier prCJ9%am are identical to those now in effect in Districts 1, 2, 3, s, 6, 11 and 13. Over the years, user fee rates have been adjusted in the various Districts. Table 2 shows the original single-family residence rate, the year of inplementation, and currently estimated 1991-92 rate for each of the Districts. Q::taber 30, 1990 Page Four TABLE 2 · ALL DISTRicrs SINGl:E-~Y RFSIDEK:E ANNUAL USER F.EE HIS'IORY ES'1'IMMED ORIGINAL !EAR 1990-91 1991-92 DISTRICT RATE IMPIBMERl'ED RATE RATE 1 $26.40 1985-86 $55.00 $ 70.00 2 55.00 1990-91 55.00 60.00 3 30.36 1989-90 50.00 60.00 5 26.40 1981-82 55.00 65.00 6 26.40 1983-84 55.00 65.00 7 -0-Proposed 91-92 -0-40.00 11 26.40 1988-89 50.00 55.00 13* 70.00 1984-85 95.00 100.00 14** -0--0--0- * District 13 Receives No Ad Valorem Property Taxes ** Financed by Irvine Ranch Water District Once llplemented, the user fee anomts are evaluated by the Boaz:d annually to make sure that the program provides adequate revenues to meet the District's funding needs. The increases shown on Schedule B are only estimates for illustration. USER EBE OIIDINAlCE In a.ccomance with the inplenenta.tion plan, the next step is the introduction of an Ordinance to adopt the supplenental user fees. Attached as Exhibit 1 is a menorandum fran the General Counsel regarding procedures for adopting the Ordinance; and Exhibit 2 which is a draft of an ordinance Establishing Sanitary Sewer Service Charges. If approved, this ordinance will be considered by the Boaz:d for introduction and first reading at the January 9, 1991 neeting. After plblication, the second reading and adoption is scheduled for the neeting on Febmary 13, 1991. The effective date of the Ordinance wcu1d be July 1, 1991. PUBLIC HEARmG ON PROPOSED COI:aLErn'ICE OF USER EBE ON PROPERfi TAX BIIiLS The llDSt cost-effective way to collect the supplenental user fees is on the amma1 property tax bill. This is the net.hod used by other Districts that have inplemented the fees. The attached General Counsel's DEDDrandum (Exhibit 1) also discusses these procedures. We are required by law to notify every property amer in District No. 7 and to hold a public hearing on our proposed use of the joint consolidated property tax bill to collect the supplenental user fee. We will do this through a plbli.c notice that will be mailed in Febmary notifying each District No. 7 property owner of our proposal to use the tax bill to collect the user fee. staff will conduct a public workshop,· tentatively scheduled for March 21, 1991, to discuss this proposed bi 11 i ng and collection ,,,,..---... v net.hod and answer questions. The plblic hearing date is tentatively scheduled r-.... for·April 16, 1991. Exhibit 3 is a draft copy of the proposed notice. V October 30, 1990 Page Five DATA &\SE AND. EDP PROCESSING CQSTS Inplementation of the user fee requires developnent and maintenance of a data base of all the parcels within the District by property type, as well as EDP processing of the fees for placemmt on the County of Orange property tax roll each year. The County Assessor's Office maintains a carprehensive data base of all parcels within the District. The other seven Districts which have implemented user fees have set aside funds each year in their qJerating budgets to reinh1.rse the County Assessor for the data base maintenance and EDP processing services provided to the Districts to enable them t;o bill their use1: fees via the tax roll. First year costs to obtain the data base have been set by the Assessor's Office at $2.00 per parcel, or approximately $82.,000. Annual data base maintenance and EDP processing costs for District No. 7 in subsequent years are expected to range between $6,000 and $8,000. FINAK:':DG CAPITAL FACILITIES REDUIREMEim'S Borrowing: In 1986 the Boa:cd engaged financial and legal consultants to assist the Directors in evaluating the potential benefits and costs assooiated with issuance of long-ter:m debt financing to take advantage of then-favorable tax law provisions and law, tax-exenpt mnicipal bond inte:rest rates prior to an anticipated change in federal tax law which beC'ame effective on Septenber 1, 1986. Although the District 7 Boa:cd ultimately decided not to participate in 1986, the primacy reasons for considering use of long-ter:m debt securities such as certificates of participation for capital consb:uction financing at that tine \ere to: -Provide a partial sou:roe of capital financing to meet Joint Works and trunk sewer system facilities consb::uction requirements and necessar.y capital replacemmt reserves over the next several years. -Al.law the District to continue to invest its existing capital reserves in the County ccmningled investmmt pool managed by the County T.reasUl:er and benefit fran the favorable spread between investmmt returns and the potentially lower rate of inte:rest paid for the securities. -Take advantage of then-favorable tax laws and law capital market inte:rest rates that would be financially beneficial to the Districts. -Help preserve existing capital reserves for master-planned sewerage facilities construction projects. The recently approved "2020 VISIOO" J.Dng-Range Financial Plan reccmnends implementation of a policy of bor.rawing for approximately 50% of our capital needs in onier to stabilize user fees and to al.locate facilities - costs to the :futm:e users. The balance of capital needs for facilities expansion will be provided by connection fees. October 30, 1990 Page Six Pursuant to the adopted IDng-Range Financial Plan, District 7 's first transaction, 1990-92 Series A in the mmt of $9,810,000, was issued in DeceuLer 1990. Connection Fees: '!be other major existing source of capital funds is fran a one-tiDe connection fee on new develqment. These fees are used to finance the planning, design and construction of the expanded facilities necessaz:y to accamrxiate the flOW' generated by the new develqment. District No. 7's one-tiDe comiection fees are presented belOW': Existing 7/1/90 Estimated 7/1/91 Single/Mll.ti-Family JMel.ling Units $2 I 280 per Dwelling $2,390 per JMel.ling Camercial/Industrial/ Gove:cnnental/other $460 per 1,000 Sq. Ft. $480 per 1,000 Sq. Ft. Connection fees are evaluated ammally and fi:xed in an anamt that assures that new developoant pays the current capital cost of providing sewerage services in acconiance with Boani policy. IMPAC!' OF PEND!m USER FEE AND ~ON FEE STUDY Concern has been expressed by members of the public during other Districts' user fee adoption processes that our three-tier rate structure is not equitable. In response to these and other issues, the firm of Janes M:mtganecy Engineering was recently engaged to conduct a detailed user fee and connection ·fee study. The purpose of the study is to evaluate the sewer use in Orange County by various user categories and to establish fee ratios that reflect this use. The results of the study and the consultant's :recc::uueudations will be brought to the Boanis for consideration and approval, however, it is not expected to be carpleted in tiDe to incmporate into the user fee adoption/inplementa.tion process for District 7. But it is anticipated that m:>re categories will be added and that different ratios may be proposed. If so, staff will prepare revised user fee rate reccmmendations for consideration and adoption by all Districts at that tiDe. RECCMemED BOARD .ACl'IONS The staff reccmnends the follow:ing Boani action: Direct staff to proceed with inplementa.tion of the user fee program in acconiance with the revised inplementa.tion plan set forth herein, and to agendize introduction of the user fee ordinance for first reading at the January 9 I 1991, Boani neeting • cm:lc DIST.INF90/SR.7.l.1-.6 ( ( ( aum SAlllTAll• DISTRICT IO. 7 12/J/90 STATEMENT Of PROJECTED CASH fLCll P1g1 1 FISCAL YEARS 199CM991 THICIJGH 1999·2000 LINE 1990·91 1991·92 1~-9J 199J·94 19M·95 5·Y11r total 1995-2000 10·Ynr Tot1l LIME ---·------·-----------· ·--···----··· OPERATING fllHD ·--·------·---Reaervea & Carry·Over f l'Clll L11t Year 7,115,000 8,01J,OOO 8,104,000 9,41J,OOO 9,n2,aoo 7,US,000 10,JOJ,OOO 7,185,000 ·--········ ····--··-·· ---········ ··-·-------····------·--·········· ··-······-· --·····-··- REVENUE 2 Shere of 11 tu Allocation 4,J24,000 4,656,000 5,014,000 5,401,000 s,111,oao ZS,21J,OOO 36,599,oOo . 61,812,000 2 l fee1: lnclaltrlal waste 445,0CO 512,000 589,000 671,000 719,000 J,002,000 6,041,000 9,04J,OOO J 4 User Fen J,26J,DGO J,125,000 4,40J,OOO 4,997,000 16,4U,OOO JJ,080,000 4',568,000 ' 5 Interest & Ml1celleneous lncC1119 564,000 59J,OOO 642,000 671,000 109,000 J, 186,000 J,809,000 6,995,000 s 6 Other Reva.. ~ ··-··-·-··-······-----........... ············ ·-·······-· --·-·····-· ····-·-···· ....•...... 7 TOTAL REVENUE 5,JlJ,000 9,024,000 10,070,GOO 11, 159,000 12,JOJ,OOO 47,U9,000 '19,529,000 127,418,000 7 ............ ···---····· ---·····--· ········-·· . ·····----·· .........•. ·····-··--· ·-········· e TOTAL AVAILABLE RJllDlllG 1J,218,000 17,0J7,000 18,714,000 20,512,000 22,015,000 55,714,000 at,m,ooo 1JS,JOJ,CIOO 8 ·····-··---··-----···· ·-·······-· ·-···-··-·· -·-------·-·-·-··--··· --······-·· --········· EXPEHDITUIES -----····-·· 9 Share of Joint Uorka II & O J,6SO,OOO 4,232,000 4,4JO,OOO 5,095,000 S,859,000 D,296,000 45,01,000 61,727,000 ' 10 Collection System H & O and Other Clper. 1,525,000 1,601,000 1,681,000 1,765,000 1,m,000 8,,zs,ooo 10,151,000 1',176,000 10 11 Debt Service 2,500,000 J,250,000 4,000,000 4,000,000 1J,750,~ D,500,000 J7"25D,OOO 11 ·······----.......•... --······-·· ·········--·····-----· -----·-----······--···· -·-·····--- 12 TOTAL EXPENDITURES 5,205,000 8,Jn,ooo ·9,J61,000 10,860,000 11,n2,ooo 45,4TI,OOO '19 ,682,000 125, 15J,OOO 12 ········--· ··········---········-····-······ ··-·······-........... ·····-····· ......•.... 1J aaervu & Carry·Over to Mut Year 8,01J,CIOO 8,104,000 9,41J,OOO 9,712,000 10,JOJ,OOO 10,JQJ,OOO 10, 150,000 10,150,000 1J 14 lleat Year 11 Dry Period fantlng lequlr-.ta 2,605,000 4,167,000 4,681,000 5,430,000 5,156,000 5,156,000 f,515,000 t,515,000 14 •.......... ········---·····--···-.......•..• ··-···-----··-········ ··-----···· ·······---- 15 fwxl Balance or <Def lclt> S,410,000 4,5J7,000 4,1J2,000 4,212,000 4,447,000 4,447,GOO 515,0GO 515,00C. 15 -·--··--···------------··--...... -. -·-------------- 16 Single f•tlv Residence User fn 165 115 U5 195 1140 16 m e 17 llumer of Equivalent Dwelling Unit• 50,200 51,000 51,800 52,600 56,600 17 18 E1tl111ated user feel SJ,263,000 IJ,825,000 M,40J,OOO 14,997,000 17,924,000 11 B IS' CXUln SAIUTATIOll DISTllCT llO. 7 1Z/J/90 STATEllEHT OF PROJECTED CASH FLOll P1ge 1 FISCAL YEARS 1990·1991 THRCUGH 1999·ZDOO LlllE 1990·91 1991·92 1992·93 1993·94 1994·95 5·Yter Total 1995·2000 10·Tur Total Liii£ ·-----··----·------·-·· ·····•······· OPERA Tl NG fUllD ·------------- Re1erve1 I C1rry·OV.r f rae L11c T••r 7,61J,OOO 7,721,000 1,739,000 9,721,000 10,226,000 7,61J,OOO 10,943,000 7,613,000 -·--······· ·----------··-------------------------------·········--····-------........... REVENUE z Shire of 11 Tile Allocation 4,3Z4,000 4,656,000 5,014,000 5,401,000 5,111,000 25,213,000 36,599,000 61,112,000 2 J fHll lrdJltrlal 1111t1 445,000 512,000 589,000 677,ooo 179,000 3,002,000 6,041,000 9,043,000 J 4 UaerfHI J,600,000 4,086,000 4,580,000 5,082,000 17,348,000 34,662,000 5Z,010,000 4 5 lnt1r11t I Ml1c1ll~ lnca111 544,000 583,000 654,000 707,000 750,000 J,238,000 4,296,000 7,534,000 5 6 Other Reverue 6 ···-······· -----------........... ..••••....• ••••••o •••• ........... -----------........... 7 TOTAL REVEllUE 5,31J,OOO 9,351,000 10,343,000 11,365,000 . 12,429,000 48,801,000 11,591,000 130,399,000 r ·--········ ··········-···--------------····· ··--------· ........... ··········-········-·· a TOTAL AVAILAILI fUllDINQ 12,926,000 11,on,000 19,11112,000 21,006,000 22,655,000 56,414,000 92,541,000 131,012,000 I -------·-·· ·········-------------····--·----............ ........... ·········--........... EXPEND llURES ·---····--·- 9 Shere of Joint Work• M & O J,680,000 4,ZJ2,000 4,430,000 5,095,000 5,159,000 ZJ,296,000 45,431,000 61,m,ooo . ' 10 Collection Syat• M & o end Other Oplr. 1,5ZS,OOO 1,601,000 1,681,000 1,765,000 1,153,000 1,425,000 10,751,000 19, 176,000 10 11 Debt Service 2,500,000 3,250,000 4,000,000 4,000,000 13,750,000 ZJ,500,000 37,250,000 11 ' ····--····-............ ··--·-···-------·-···· ...•...•... . .......... ----·-····· ------·--·-1Z TOTAL EXPEllDln.ES 5,205,000 1,m,000 9,361,000 10,l60,000 11,712,000 45 14TI,OOO 79,682,000 125, 153,000 12 ' -----------·---------------------·-··-···-·· ·····--·--· ----------------·····-........... 1J R11erve1 I Cerry·OV.r co Next Year 7,721,000 1,n9,ooo 9,721,000 10,226,000 10,943,000 10,943,000 12,159,000 12,159,000 13 14 Next Yter•1 Dry Period f&aldl119 Req.11!'-te 2,60J,OOO 4, 167,000 4,681,000 5,430,000 5,156,000 5,156,000 9,575,000 9,575,000 14 -----------------------------------------------------·· ···-------· ·-----····-........... 15 fin:t l1lence or (Deficit> 5, 111,000 4,572,000 5,040,000 4,196,000 5,087,000 5,087,000 3,214,000. 3,214,000 15 ------·---------------- 16 Sl119l1 f•l ly Rt1ldenc1 Uatr f" 145 150 155 l90 16 17 Nunber of Equlv1lent Dwell Ing 1Ktlt1 90,000 90,800 91,600 92,400 96,400 17 18 E1tl .. ted U11r fltl 13,600,000 14,006,000 14,580,000 15,082,000 18,676,000 ta m B ti Cl ~ ti> "' :r: 0 6 ~ 12/5/90 JYLX 90 Approve 90-91 Budgote ----·----~ Create CSDOC data baae for SFR/HFR/Non- reddential building• Update caah flow projection•/ roquira.,ent• DBCBHBBB 90 Review long-range Financial Plan and approve iaplementa- tion •chedule 12/12/90 Produce 1991-92 list of parcel•/ fee• for uaer fee report to Board• USBR FEB IHPLBHBHTATION &CBBDULB JAHUl\BX 91 Introduce ordinance e.tablhhing uaer fee• for 1991-92 l/9/91 DQRUARI 91 Second reading and adoption of uaer fee ordinance eatablhhing 1991-91 uaer fee achedule Coordinate out aide printing mailing notice• ~ HARCB 91 Conduct public worltahop l/21/91 APRIL 91 Conduct public hearing re uae of tax bill to collect uaer fee• -'/16/tl Adjourned Heating Receive and fi~.c;. uaer fee report dHcdbing property ' f-to be levied - C 16/91 Adjol1%11ad Adopt reaolution approving blling and collection metbod/uaer fee report C/16/91 Adjonrned Heating PACE l JUL-AUG U Approve 91-92 Budget Review and proceaa output from data baaa/ raaaarcb ' correct axcaptiona/ turn in final tap• to Co. Auditor for 1991-92 tu bllh Continued reaaarch and deYelopmant of CSDOC data baaa ORDINANCE NO. 725 ORDINANCE OF THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 7 OF ORANGE COUNTY, CALIFORNIA, ESTABLISHING SANITARY SEWER SERVICE CHARGES EXHIBIT 2 The Board of Directors of County Sanitation District No. 7 of Orange County, California, does hereby FIND: A. That a Comprehensive 30-year Master Plan of Capital Facilities entitled "Collection, Treatment and Disposal Facilities Master Plan -1989", hereinafter the "Master Plan", which includes detailed financial and engineering reports, has been prepared, approved and adopted by the Board of Directors setting forth and identifying the required future development of District and jointly owned facilities, including the financial projections for providing sewer service to all properties within the District service area; and B. That the financial and engineering reports of the Master Plan have been made available to the public and have been subject to noticed public hearings, all in accordance with the provisions of Government Code Section 54992 which Section has been repealed and reenacted as Government Code Section 66016 effective January 1, 1991 and other provisions of law; and, c. That the revenues derived under the provisions of this Ordinance will be used for the acquisition, construction, reconstruction, maintenance and operation of the sewage ~ollection facilities, wastewater treatment and disposal facilities of the District; to repay principal and interest on debt instruments or to repay Federal or State loans issued for the construction and reconstruction of said sewerage facilities, together with costs of administration and provisions for necessary reserves; and, D. That the·properties upon which the fees established by this Ordinance are levied discharge wastewater to the District's collection, treatment and disposal facilities. The costs of operating and maintaining said facilities has constantly increased due in part to increased regulatory requirements to upgrade the treatment process, and said costs now exceed the amounts of any ad valorem tax revenues received from said properties; and E. That the need for upgraded and improved treatment of all wastewater collection, treatment and disposal facilities is required to protect the public health and safety to preserve the environment without damage; and F. That the new fees established by this Ordinance do not exceed the estimated amount required to provide the sewer service for which the fee is levied, as provided in Government Code Sections 54991 and ~4992 which Sections have been repealed and reenacted as Government Code Sections 66013 and 66016; and G. That the change in rate·struct~re will not necessarily result in an expansion of facilities to provide for growth outside the existing service area. The adoption of these rates will not result in any specific project nor result in a direct physical change in the environment; and, H. That the District has, on July 19, 1989, adopted a Final Program Environmental Impact Report in accordance with legally required notices and public hearing, related to the Master Plan, including the financial program; and, I. That the proposed increases in the sewer service charges are established upon a rational basis between the fees charged each customer and the service and facilities provided to each new customer to the District; and, -2- J. That the adoption of this Ordinance is statutorily exempt under the California Environmental Quality Act from further "'--11 environmental assessment pursuant to the provisions of California Public Resources Code Section 21080(b) (8) and California Code of Regulations Sections 15273(a). NOW, THEREFORE, the Board of Directors of County Sanitation District No. 7 of Orange County, California, does hereby ORDAIN: Section 1: Purpose. The purpose of this Ordinance is to establish a system of sanitary sewer service charges required to be paid by property owners for the services and facilities furnished by the District in connection with its sanitation treatment works and sewage collection system. Revenues derived under the provisions of this Ordinance shall be used for the acquisition, constructio~, reconstruction, maintenance and operation of the sewage collection facilities, wastewater treatment and d.isposal facilities of the District; to ·repay principal and interest on debt instruments or to repay Federal or state loans issued for the construction and reconstruction of said sewerage facilities, together with costs of administration and provisions for necessary reserves. Section 2: Annual Sanitary Sewer Service Charge. Commencing July 1, 1991, each parcel of real property located within the District which is improved with structures designed for residential, commercial or industrial use and connected to the District's system, shall pay a sanitary sewer service charge based on the average volume of wastewater discharged by a class of users in the sum or sums as set forth in Table A of this Ordinance. -3- Section 3: Application of Ordinance. The provisions of this Ordinance shall be in addition to Ordinance Nos. 722 and 724 and Resolution No. 90-107-7 of the District establishing regulations \.,_) for use of District's sewerage facilities, including provisions for payment of charges or fees related thereto. Section 4: Exceptions. The provisions of this Ordinance shall apply to all properties in the District, and no exception shall be provided for properties otherwise deemed exempt from payment of taxes or assessments by provisions of the State Constitution or statute, including· properties owned by other public agencies or tax exempt organizations, except as expressly provided in Section 5 hereof. Section 5: Exemptions and Appeals. In recognition that certain legal parcels of real property exist within the District which are not connected to the District system and that other ~ properties acquire considerably greater potable water than is ultimately discharged to the District's system it is the intent of the District that said parcels be exempt totally or in part from the payment of charges as prescribed herein. Any property owner may appeal the assessment of the charges and submit a claim for rebate to the District on the forms prescribed and provided by the District, within one hundred twenty (120) days after the annual bill is mailed. All applications for rebate of the annual sewer service charge will be determined by the General Manager of the District or his designee, -4- who may grant a partial or full rebate or adjustment of the charge based on receiving satisfactory proot that an inequity exists ~ between the amount and the amount of wastewater discharged to the District's system. Such inequities may include, but are not limited to, the following instances: (a) The use of the parcel differs from the use indicated by the charge; (b) No service connection to the District's system exists from the parcel charged; (c) The principal water use is agricultural; (d) Any other use wherein the amount of wastewater discharged to the District's system is significantly less on a regular basis than the amount that would normally be expected to be discharged by the class of property in· question. Section 6: Annual Charge Based on Fiscal Year. The sanitary sewer service charge established by this Ordinance shall remain in effect until such time as the rates adopted by the District Ordinance.are changed, and there shall be no proration of such charges in any fiscal year. Section 7: Method of Collection. Pursuant to the authority granted by California Health & Safety Code Section 5473, all charges established herein shall be collected on the County Tax Roll in the same manner, by the same persons and at the same time as, together with and not separately from, its general taxes. The County Tax Collector is authorized and hereby ordered to make said collections in accordance with the terms and conditions of agreements between the County of Orange and this District. -5- In the event the District determines that errors or inequities exist in the amount of charges to be collected by the County Tax Collector, District may submit a bill for any difference directly to the property owner. Said invoiced amount shall be due and payable within thirty (30) days of invoice date. Section 8: Credit for Industrial Permittees. A credit shall be allowed to all dischargers permitted pursuant to Article 3 of Ordinance No. 722 in an amount equal to the annual sanitary sewer service charge established by Section 2 of this Ordinance in the same manner as credit is allowed for ad valorem taxes pursuant to Sections 302.6(B), 303.6(B), and 304.6(B)(4) of Ordinance No. 722. Section 9: Severability. If any provisions of this Ordinance or the application to any person or circumstance is held invalid by order of court, the remainder of the Ordinance or the application of such provision to other persons or other circumstances shall not be affected. Section 10: Effective Date. This Ordinance shall become effective July 1, 1991. Section 11: The Secretary of the Board shall certify to the adoption of this Ordinance and shall cause the same to be published in a newspaper of general circulation in the District, as ·required by law. -6- u v PASSED AND ADOPTED by the affirmative vote of greater than .....,_;· two-thirds of the Board of Directors of County Sanitation District No. 7 of Orange County, California, at a regular meeting held February 13, 1991. ""'-" "'--"'' ATTEST: Chairman.of~he Board-of Directors County Sanitation District No. 7 of Orange County, California Secretary of the Board of Directors County Sanitation District No. 7 of of Orange County, California -7- Class of User Single-Family Dwellings/ Condominiums Multi-Family Dwellings/ Mobile Homes/ Apartments Commercial/ Industrial/ Other (government Buildings, utilities, nonprofit organizations, etc.) TABLE A Basis of Charge Charge per Dwelling Unit Charge per Dwelling Unit Charge per 1,000 square feet of building 1991-92 Annual Rate $40.00 $24.00 $28.60 Minimum Annual Charge Per Unit $40.00 $24.00 $28.60 v COUNTY SANITATION DISTRICT NO. 7 NOTICE OF PUBLIC HEARING e NOTICE OF PUBLIC HEARING e 1 Notice is hereby given pursuant to California Health and Safety Code Section 5473.1 of a public hearing to be held by County Sanitation District No. 7 of Orange County , California at 7:30 p .m . on Thursday , April 18 , 1991 , at the Tustin Presbyterian Church , lo c ated at 225 West Main Street, Tustin , Ca lifornia . Said hearing i s to be held for the purpo s e of r eview i ng written reports pertaining to all properties which are provided sewer service within County Sanitation District No. 7, and to con si der publi c c omm ents regarding use of the County of Oran g e prope rty t ax roll for billing of the District sewe r se rvi ce charge s for sewer c ollection , treatment and disposal servi ces for the fiscal year comm encing July 1, 1991 . Wastewater from yo ur home or b us iness is coll ected by yo ur local street sewer syst em , wh ich is mainta ined by your ci t y or sanitary di strict. The st reet sewers f low into large interce ptor sewers in y our area ow ned by Cou nty Sanitation Distri ct No. 7. Di stri ct N o. 7 , which is the s haded area on the map , is one of nin e Di stricts t hat m ake u p the County S anitation Dist ricts of O ra nge Co unty, whi ch serve t he metropoli tan a rea of the County. These Districts j oi ntl y own and operate the regional sewage treatm e nt p lant s in Fo un tai n Vall e y and Huntington Beach . The Sanitation Di stricts are c ha rged with protecting public health and th e environment. The Sanitati o n Di stricts' ope r ati o ns a re regulated by federal and state environmental agencies. In recent years, these agencies hav e adopted and imposed mo re stringent laws and reg ul atio n s to protect o ur env iron m ent. In order to co mpl y wi th the new regul ati on s, new ad vanced sewage treatm ent faci lities m ust be m aintai n ed and o pe rat ed, w hich res ult in 'ricreased operating cost s. Rising cost s and decreasi ng reserv es w e re forci ng District ~o. 7 into a fina nc ial crisis (see graph). T o co ntinue providing the hi gh level of servi ce and env iron m e nt al protection yo u are accu stom ed to , Di st rict No . 7 recent ly ad opted a sew er servi ce us er fee. T his fee h as been set at $40 .00 p er year ($3 .33 a month) for resid ences, $24.00 per year fo r apartm ents and mobile hom es, and $28.60 per 1,000/sq . ft . of bui ldi ng space pe r year for comme rcial and indu strial custom er s. User fees are not us ed for new development. Fees for new d evelopment are pa id for by th e dev eloper co nnecting to the se w er sy stem. Larg e industrial and commercial users will continu e to pay an a dditi onal fee, based upon act ual u se, esta bli sh ed in 19 76 and rev ised annually. O ur ongoi ng g oa l is to m aintai n effective and effi ci e nt w aste wate r ma nagem ent servi ces. T he c h all eng es we mu st co nt i nu all y face are increasing service demands as popul ati on grow s, and incre asingly stringent environm ental regulati ons . The f ees refl ect th e immediate fin a ncial needs of your Di st rict a nd will be revie wed a nd adj usted as needed to continue p ro tecting public health a nd ou r precious environment. PROPOSED BILLING AND COLLECTION METHOD Co unty Sanitation District No. 7 is pro p osi ng to co ll ect its sewe r se rvice user fee as a separate line item on the ann ual prope rt y tax bill. Us e of th is more c ost-effecti ve alternative m ethod will all ow the Di st rict an d its custom ers to sav e the costs of produ cing , maili ng a nd hand ling separate ut ili ty bills for direct pay m ents . Every prop erty owner within the Di st ri ct r eceives an annual pro perty tax bill from t he Co unty Tax Collector. California Healt h and Safety Code S ecti o n 5473 all ow s the Di stri ct to place its fee on th is b ill as a separate line item , th us pr ovid ing the u ser w ith the convenience of in cl uding paym ent fo r Di strict No . 7 sewerage service wi th p ro p erty tax paym ents. Therefore, effec ti ve with the b illi ng year beginning July 1, 1991, the B oard of Di rectors of Distri ct No . 7 is prop osing to use this billi ng m ethod to help keep down t he cost of service. The above noticed publlc hearing Is to consider the proposal to use the property tax blll to collect the annual sewer service user fee Instead of a separate direct and more costly bllllng method . FURTHER INFORMATION/PUBLIC WORKSHOP The q uestion-and-answer section of t hi s n otice attem pts to address so m e of the q uestions you may have. In ad dit ion, a w or ks hop has been scheduled where staff will pro v ide m ore d eta il ed info r mati o n a nd will be avai lable to answe r any additi on al questio ns (see back side of m ailer for location). M I 0 H .. 12 10 ...... DISTRICT NO. 7 OPERATI NG FUND RESERV ES AND DEF ICIT P ROJECT ION RES ER V ES REVENUE EXPS..SES ag..go QO..G1 01-02 «2·03 F ISC "1. YEAR z 0 -I -0 m 0 .,, \J c: m r -0 :c m )> :0 -z G) () 0 c: :J "Tl .:;: 0 (/) c: fl) :J 2 . fil: -:J ~ < "tl ,,. fl) 0 :J = 0 <t> OJ-· ';.< 0 !!?. () x ::::!. )> CD n_ ...... en )8~2. ..... 0 f\) .., CD fl> I :J CD co f\) <t> ..... () 0 c: :J .:;: ) QUESTIONS & ANSWERS ( la---- 1. Q What if I feel I should be exempt from the charge? A If your property isn't connected to the local sewer system, you are exempt. Simply attach a copy of your tax bill to a letter of explanation and mail it to the Orange County Santition Districts , P.O. Box 8127 , Fountain Valley , CA 92728-8127 . 2. Q I already pay a charge for sewer service on my water bill. Is this a duplicate charge? A No. The sewer service charge you now pay is for your connection to the local street sewers operated and maintained by the city or a local sanitary district. Their sewer system connects to the District No. 7 trunk sewer system. The District No. 7 fee will be used to pay for the District's reg iona l tru nk sewers and the regional treatment and disposal facilities located in Fountain Valley and Huntington Beach that transport, treat and safely dispose of your wastewater. 3. Q I already pay a charge to your Districts on my tax bil l. Why another charge? A The charge you cu rrently pay on your tax bill is for repayment of bonds sold many years ago to pay for construction of some of the facilities you are now using. The new charges will pay for operating, mainta i ning and rehabilitating the existing sewerage system faci litie s. 4. Q What do you mean by rehabilitation? A Many segments of the sewer system were constructed more than 30 years ago and may deteriorate as they grow older. We can extend the life of the pipes, thereby avoiding replacement , by making improvements to the existing li nes and pu mp stations. 5 . Q Is this money to be used to expand the system to accommodate more growth? A No . New sewer lines a re funded by substantial connection fees paid by developers of new construction projects that are connected to the sewer. 6. Q I thought that under Proposition 13 any increase in taxes required voter approval ? A The user fees do not require a vote under Proposition 13. It is a fee for use, not a tax. Water pollution control regulations mandate d by the Environmental Protection Agency (EPA) and State health laws require us to meet certain pub l ic health standards. The fees wi ll provide sufficient f u nds t o meet these mandated r equirements, protect the health of the pub lic and keep our waters clean . 7. Q Are there other ways to collect these fees without putting them on our tax bill? A Yes. The Districts could establish separate direct billing and collection systems . The cost of operating such billing systems would increase the fees 15 to 20 percent for the ave rage homeowner. If you have questions or wish further information, please call the Sanitation Districts ' office at (714) 962-2411 , Extension 5. PUBLIC WORKSHOP Tustin Presbyterian Church Fellowship Hall 225 West Main Street City of Tustin THURSDAY, MARCH 211991, 7:30 PM PUBLIC HEARING Tusti n Presbyterian Church Fe ll owship Hall 225 West Mai n Street City of Tustin THURSDAY, APRIL 18, 1991 7:30 PM ., RE: AGENDA ITEM #3(a)(4) __ '1 COUNTY SANITATION DISTRICTS of ORANGE COUNTY, CALIFORNIA DISTRicr 7 PROPOSAL 'IO COLLECr USER FEE ON PROPERrY TAX BILL 10844 ELLIS AVENUE P.O. BOX 8127 FOUNTAIN VALLEY, CALIFORNIA 92728-8127 Sunmarv of Written Ccmnents Received Through April 10, 1991 I. Should Not be on Property Tax Bill: John Rau 2017 Cantella Pl. Newport Beach, CA 92660 II. Properties Not Connected to Sewer: Jane Vaughn 2052 Ia Cuesta Dr. Santa Ana Bemard c. Mallard 1432 Caneo Dr. Tustin Quentin P. Johnson TR 17621 Fiesta Way Tustin Floyd E. Curl 1411 Lance Dr. Tustin Wanda O'Dell 17341 M::Fadden Tustin Western Hane Financmg Co:cp 10530 Brier Ln. Santa Ana Albert J. stefan 10472 Broadview Pl. Santa Ana IRVINE TUSTIN Thanas L. Gunkel, II 11242 Ia Vereda Dr. Santa Ana w. Donald Bowman 1681 Mitchell AVe. Tustin Junior L. James 150 S. Pacific St. Tustin Robert M. Phillips 17662 Westbw:y Ln. Tustin Patricia M. Riddle 14031 Woodlawn Ave. Tustin Richard L. Crawfoni 14172 Clarissa Ln. Santa Ana Metropolitan Waste 16381 Construction w er. Irvine C? 141 962-2411 Page 2 II. Properties not Connected to Sewer (Cont'd) • UNDlCORPORA'mD AREAS (Cont'd. ) Daniel J. Hannes 13772 N. Deodar st. Santa Ana Tharas E. King TR 13871 Deodar st. Santa Ana Eugene B. Erbentraut 13911 N. Decdar st. Santa Ana Alvin R. Pauck TR 13922 N. Deodar st. Santa Ana Robert F. Cole 12952 Elizabeth Way Tustin Ralph C. Anderson 19131 E. F.questrian Ln. Orange Dan w. Townley 12451 Eveningside Dr. Santa Ana Ioois F. Lyon TR 18231 E. Fairhaven Ave. Santa Ana Ronald P. Fialcad.tz 10391 Greenbrier Rd. Santa Ana Robert E. casey TR 3 La Rana Dr. San~ Ana REF:2/Dist7.Lst Jack M. Hollander '1R 13531 Malena Dr. Tustin Gregorio Aguirre, Jr. 13812 Pasadena Ave. Santa Ana Belford L. Phillips 12652 Prospect Ave. Santa Ana Wiley C. Raulston TR 1762 Sierra Alta Dr. Santa Ana Dayton o. Dargatz 19102 E. Smiley Dr. Orange Ray M. Hall 1031 SnDke Tree Ln. Santa Ana Victor B. Bertagna TR 1112 st. John Pl. Santa Ana Rollo S. Pickford 1111 st. Vincent Pl. Santa Ana E. W. Baml in 1221 Trimrphal Way Santa Ana <. v -~ . John c. Rau 2017 Centella Pl. Newport Beach, CA.92660 March 13, 1991 County Sanitation Districts of o.c. P.O.Box 8127 Fountain Valley, CA.92728-8127 ATTENTION: Sanitation District #7, Mz. Judy Lee. RE: NOTICE OF PUBLIC HEARING, recieved March 11, 1991 Dear Mz. Lee: Pursuant to my verbal conversation with you on March 12th on subject matter, I am requesting a review of the proposed "FEE" on my commercial building at 3120 Pullman ST., Costa Mesa, AKA parcel #427-032-01. The reason for this request is that based on your proposed "FEE", we would be paying almost ten times the current fee, which seems very excessive. I am enclosing copies of the water bills for this property, from 04/11/89 to 12/11/90 and copies of the Tax Bills for F/Y 89/90 and 90/91, to assist you in your review. Also, there is approximately 3000 sq.ft. of landscape area being watered. I am also very opposed to this "FEE" being placed on my Property Tax Bill. If this "FEE" is not a Tax,as you claim, then it should not be collected thru our Property Tax Collection System. Sincerely, h_~ L ~~ Joh/~.1,~ MEETING DATE April 18, I 9 9 I DISIBICT1 (FERRYMAN) ••••• WAHNER •••••• (EDGAR) •••••••• PUCKETT •••••• -- (BEYER) ••••••••• BARRERA ••••• == (YOUNG) •••••••• GRJSET ••••••• (ROTii) •••••••••• STANTON ••••• == DISJBICT2 (HUNTER) ....... PICKLER •••••• __ (SCOTl) ••••••••• ca.LJNS •••••• __ (BEYER) ••••••••• BARRERA • ., ••• __ (DENES) •••••••• BELL •••••••••• (NORBY} ........ CATLIN ........ == (FLORA) ••••••••• MAHONEY ..... __ (CULVER) ....... MAIN ......... __ (PARKER) ••••••• NB.SON, C ••••• __ (DO'VllNEY} ••••••• NEWTON •••••• __ (McGUIGAN) ••••• PWDO · ••••••• __ (GULLIXSON) •••• SCHWING ••••• __ (ROTii) •••••••••• STANTON ••••• __ PISTRICI3 (DOTSON) ••••••• SAPIEN ....... __ (ROBITAILLE) •••• GREEN •••••••• __ (AGE) ••••••••••• BOWPJIAN •••••• __ (NORBY} •••••••• CATLIN •••••••• __ (SCOTT) ••••••••• COlLINS •••••• __ (MA8'1) .......... CULVER ••••••• (Nasa..a. C.) •••• DUNLAP ••••••• -- (RICE) •••••••••• EVANS •••••••• == (MAHONEY} •••••• R.ORA •••••••• __ (McCUNE) ....... GRJFFW ••••••• __ (RICHARDSON) ••• McGUIGAN •••• __ (MINER) ••••••••• NELSCIN, K ••••• __ (HUNTER} ••••••• PICKLER •••••• __ (ROTH) •••••••••• STANTCJN ••••• __ (JEMPSA) ••••••• SYLVIA •••••••• __ (LASZLO) •••••••• WILSON •••••• __ OISmlCTS (PLUMMER) •••••• HART ••••••••• (COX) ••••••••••• SANSONE ••••• == (STANTON) •••••• ROTH ••••••••• __ DISJBICI& (HART) •••••••••• Pl.tAAMER ••••• __ (SHERRICK) ••••• WAHNER •••••• __ (STANTON) •••••• ROTH ••••••••• __ p1SmlCT7 /_ (PUCKETT) ...... EDGAR ........ ~ __ (READE) ........ WAHNER ...... JL. (BEYER) ......... BARRERA ..... ~ - (PLUMMER) •••••• COX •••••••••• ~/- (PULIDO) •••••••• RICHARDSON •• -1£ (STANTON) ...... ROTif ......... ~ == (HAMMOND) ••••• SHERIDAN ••••• ~ -- PISTRICT11 (MOULTON· PATTERSON) .••••• WINCHELL ••••• __ (SILVA) .......... KELLY ........ __ (ROTii) .......... STANTON ..... __ DISTRICT13 (SCHWING) •••••• GULUXSQ'<I •••• __ (BEYER) ••••••••• BARRERA ••••• __ (HUNTER) ••••••• EHRLE •••••••• __ (DUNLAP) ••••••• PARKER ••••••• __ (STANTON) ...... ROTH ......... __ PISTRICI14 (Ml.LEA) ........ SWAN ......... __ (HAMMOND) ••••• SHERIDAN ••••• __ (BEYER) ••••••••• BARRERA ••••• __ (EDGAR) ........ PONTIOUS ..... __ (STANTON) ...... ROTH ......... -- TUSTIN PRESBYTERIAN TIME 7 : 3 0 P • M. CHURCH ' JOINT BOARQS (BEYER) •••••••••••••••••••• BARRERA ••••• (DENES) •••••••••••••••••••• BELL ••••••••• -- (AGE) •••••••••••••••••••••• BOWMAN ••••• (NORBY} •••••••••••••••••••• CATLIN ••••••• -- (SCOTT) .................... CC>LLlllS •••••• == (PLUMMER) ••••••••••••••••• COX •••••••••• (MAIN) •••••••••••••••••••••• CULVER •••••• -- (NaSal, C.) •••••••••••••••• DUNLAP •••••• -- (PUCKETT) •••••••••••••••••• EDGAR ••••••• -- (HUNTER) ••••••••••••••••••• EHRLE •••••••• (RICE) •••••••••••••••••••••• EVANS •••••••• -- (MAHONEY) ................. FLORA ........ -- (ROBITAILLE) •••••••••••••••• GREEN ••••••• -- (McCUNE) ••••••••••••••••••• GRIFFIN ••••••• == (YOUNG) ••••••••••••••••••• GRISET ••••••• (SCHWING) ................. GULLIXSON ••• == (PLUMMER) ••••••••••••••••• HART ••••••••• __ (SILVA) ••••••••••••••••••••• KELLY •••••••• __ (FLORA) •••••••••••••••••••• MAHONEY ••••• (CUlVER) ................... MAIN ......... == (RICHARDSON) .............. McGUIGAN ... . (PARKER) ••••••••••••••••••• Nasa.1. c ..... -- (Mf<IER) ·• ••••••••••••••••••• Nasa.I, K. •••• -- (00\lllNEY} •••••••••••••••••• NEWTClN •••••• == (DUNLAP) ••••••••••••••••••• PARKER •••••• (HUNTER) ••••••••••••••••••• PICKLER •••••• -- (HART) ••••••••••••••••••••• PLU~ER ••••• -- (EDGAR) .................... PONTIOUS •••• (EDGAR) •••••••••••••••••••• PUCKETT ••••• == (McGUIGAN) ••••••••••••••••• PULIDO ••••••• (PULIDO) ................... RICHARDSON •• == (STANTON) ••••••••••••••••• ROlH ••••••••• (COX) •••••••••••••••••••••• SANSailE ••••• -- (~ •••••••••••••••••• SAPle.il ••••••• == (GULLIXSON) •••••••••••••••• SCHWING ••••• __ (HAl&tOND) ••••••••••••••••• SHERIDAN •••• (ROTH) ..................... STANTON ••••• == (Ml.LEA) •••••••••••••••••••• SWAN •••••••• __ (JEMPSA) ••••••••••••••••••• SYLVIA ••••••• __ (FERRYMANISHERRICKIREADE) • W~ER •••••• __ (LASZLO) ................... WLSON ••••••• - (MOULTON-PATTERSON) ••••• WINOIB.1. •••• __ SIA.EE OnJEBS SYLVESTER ••••••••• _L WOODRUFF • • • V BROWN ............ __ ANWAR ••••••• __ ANDERSON • • • • • • • • • DEMIR •••••••• __ CLAWSON •••••••••• ~ FLEMING •••••• DAWES ............. ~ HOHENER ..... __ GORCZVCA • • • • • • • • • HOUGH ••••••• HASENSTAB •••••••• HOWARD •••••• HODGES ••••••••••• ~ HUNT ••••••••• __ KYLE ............... J!!:_ KNOPF ........ __ LINDER......... • • • • LEE •••••••••• NaSON • • .. • .. .. • .. INDSTROM .... NICHOLS .......... . OOTEN ............ . LYNCH •••••••• STONE •••••••• RENESCU .. .. .. .. • • WASCW ....... STREED •••••••••••• I?"' YOUNG ••••••• VINCENT ••••••••••• WINSOR ........... . 4110J91 PUBLIC SIGN-IN SHEET DISTRI CT NO. 7 -TUSTIN PRESBY TE RI AN CHU RCH IF YOU WISH YOUR NAME TO BE REFLECTED IN THE MINUTES, PLEASE .SIGN-IN COUNTY SANITATION DISTRICTS OF ORANGE COU NTY APRI L 18 , 1991 BOARD MEETING ORGANIZATION FIRM Please Print // I c Sf L \ DISTRICT NO. 7 PUBLIC HEARING -APRIL 18, 1991 REQUEST TO PRESENT ORAL COMMENTS PURPOSE OF HEARING: RECEIVE PUBLIC COMMENTS REGARDING PROPOSED USE OF THE COUNTY OF ORANGE PROPERTY TAX ROLL FOR BILLING AND COLLECTION OF ADOPTED 1991-92 SEWER USE FEES NAME: HOME ADDRESS: NUMBER/STREET SAN r A 1-t t'f A Ycl_>oY CITY PROPERTY ADDRESS: SA-fr£ NUMBER/STREET CITY F28D DISTRICT NO. 7 PUBLIC HEARING -APRIL 18, 1991 REQUEST TO PRESENT ORAL COMMENTS PURPOSE OF HEARING: RECEIVE PUBLIC COMMENTS REGARDING PROPOSED USE OF THE COUNTY OF ORANGE PROPERTY TAX ROLL FOR BILLING AND COLLECTION OF ADOPTED 1991-92 SEWER USE FEES NAME: HOME ADDRESS: /t,/ cJ I /A ) 0 A-9 26SJO CITY PROPERTY ADDRESS: NUMBER/STREET CITY F28D DISTRICT NO. 7 PUBLIC HEARING -APRIL 18, 1991 PURPOSE OF HEARING: NAME: HOME ADDRESS: PROPERTY ADDRESS : F28D REQUEST TO PRESENT ORAL COMMENTS RECEIVE PUBLIC COMMENTS REGARDING PROPOSED USE OF THE COUNTY OF ORANGE PROPERTY TAX ROLL FOR BILLING AND COLLECTION OF ADOPTED 1991-92 SEWER USE FEES nl}'fa,~ IJa~ NUMBER/STREET s~ao ) DISTRICT NO. 7 PUBLIC HEARING -APRIL 18, 1991 REQUEST TO PRESENT ORAL COMMENTS PURPOSE OF HEARING: RECEIVE PUBLIC COMMENTS REGARDING PROPOSED USE OF THE COUNTY OF ORANGE PROPERTY TAX ROLL FOR BILLING AND COLLECTION OF ADOPTED 1991-92 SEWER USE FEES NAME: HOME ADDRESS: NUMBER/STREET Q/191% ~, -9~ t (, 7 PROPERTY ADDRESS: /ffiJMBER/STREET CITY F28D DISTRICT NO. 7 PUBLIC HEARING -APRIL 18, 1991 REQUEST TO PRESENT ORAL COMMENTS PURPOSE OF HEARING: RECEIVE PUBLIC COMMENTS REGARDING PROPOSED USE OF THE COUNTY OF ORANGE PROPERTY TAX ROLL FOR BILLING AND COLLECTION OF ADOPTED 1991-92 SEWER USE FEES NAME: HOME ADDRESS: NUMBER/STREET '7~ CITY PROPERTY ADDRESS: NUMBER/STREET CITY F28D DISTRICT NO. 7 PUBLIC HEARING -APRIL 18, 1991 REQUEST TO PRESENT ORAL COMMENTS PURPOSE OF HEARING: RECEIVE PUBLIC COMMENTS REGARDING PROPOSED USE OF THE COUNTY OF ORANGE PROPERTY TAX ROLL FOR BILLING AND COLLECTION OF ADOPTED 1991-92 SEWER USE FEES NAME: 11;}/(ly' ilcua y/ r ilff ~_;;,,, j ti> 11_{' If C, /tJt16 ~J I~ J;;v_, e NUMBER/STREET HOME ADDRESS: !dz n r$ Anet Cf ?-::7 7 ti 5--- CITY PROPERTY ADDRESS: NUMBER/STREET CITY F28D , ' DISTRICT NO. 7 PUBLIC HEARING -APRIL 18, 1991 REQUEST TO PRESENT ORAL COMMENTS PURPOSE OF HEARING: RECEIVE PUBLIC COMMENTS REGARDING PROPOSED USE OF THE COUNTY OF ORANGE PROPERTY TAX ROLL FOR BILLING AND COLLECTION OF ADOPTED 1991-92 SEWER USE FEES NAME: HOME ADDRESS: NUMBER/STREET (}/?JJ/v?6-/ C/l f?.-£tfy CITY PROPERTY ADDRESS: NUMBER/STREET CITY F28D , ' , DISTRICT NO. 7 PUBLIC HEARING -APRIL 18, 1991 REQUEST TO PRESENT ORAL COMMENTS PURPOSE OF HEARING: RECEIVE PUBLIC COMMENTS REGARDING PROPOSED USE OF THE COUNTY OF ORANGE PROPERTY TAX ROLL FOR BILLING AND COLLECTION OF ADOPTED 1991-92 SEWER USE FEES NAME: HOME ADDRESS: NUMBER/STREET PROPERTY ADDRESS: F28D Public Hearing Conments District No. 7 -April 18, 1991 Lorane Katz, 12202 Redhill Avenue, Santa Ana One of the questions is when I had made a telephone call to the District I was under the impression that although I thought the written material said the fee would be $40.00 for a single family dwelling that there was some corrrnent made about actually the fee was going to be based on a front footage or perhaps a square footage basis, and I wanted to clarify that. EDGAR: It is $40.00 for a single family, $24 for multi-family, and then a per square foot for industrial and corrrnercial. Alright. The other questions have come up simply from the presentation. I would be interested in knowing where or what is the property within District No. 13 where there are no property taxes collected? That was in Mr. Streed's presentation. STREED: Perhaps I didn't state that quite as carefully as I should have. The people in District 13 do pay property taxes. The people in District 13 along this county line, LA County, Riverside and San Bernardino, they do pay ·~ property taxes. They pay the 1% and they pay for schools and all of that stuff, but District 13 doesn't get any of that property tax money. I'm sorry that I misled. People in District 14 also pay property taxes but we don't get any of that either. Thank you. The other question is having read this material can you tell us briefly why the reported fees were significantly more than the adopted fees? What happened in the budget projections that seemed to create this disparity? STREED: I can answer that one as well. -1- Frank Costantino, 534 N. Thomas Street, Orange This $40.00 residential fee on your property tax bill, has the board considered a private engineering firm to analyze or to inspect the pipes and the sanitation district, the pumping and the treatment facilities and soforth, to determine if we really need this $40.00 increase in the tax bill per year or we can delay it for 10 years depending on the condition of the pipe and the treatment facilities? Has there been a private company to analyze this or inspected these facilities? That's what I would like to know. EDGAR: Let me respond partially to that. Basically the bulk of the cost we are talking here is the cost to process the wastewater. But unfortunately the cost of that processing has gone up by an extensible amount based upon much tougher EPA rules. We are working today by the same rules that we were permitted to use 10 years ago. So everything gets much more difficult and much more costly. Now, we do get revenue from the property tax and that goes up by the small amount, 2 or 3%, and with reappraisal a little bit more. But the problem is that the property tax share that we get hasn't gone up anywhere near as much as our mandated processing costs. It isn't a question of the equipment being antiquated, it is the most modern and sophisticated that you can think of. But when you go into the situation where you are doing a tougher job than you did 10 years ago, it has to cost more. And that is a direct reflection of federal and state law saying we have to do a better job than we have ever done. It is not antiquated equipment at all. Well, I know that. But you didn't note that on your flyer it just gave brief information. Mr. Streed was giving details on the cost but I noticed that he mentioned the Code Section that allows for assessment but he didn't give exactly what code and what section of the code. I noticed it wasn't available there. Do you know? STREED: The section of the code that empowers sanitation district boards to assess a fee is 5473, and the code section that allows us to collect the fee as a separate line item on the property tax bill is 5471. What code is that? WOODRUFF: Health and Safety. STREED: Did I say 5473.1? Thank you. That's all I have. EDGAR: It might be also.appropriate to note that everything that we've done in the county is master-planned for decades in the future so that we are projecting in the future very accurately what our expectation is in terms of how much sewer treatment there is, what the capacity is and everything else. -2- Frank Constantino -continued I know the property owners are concerned because here the country is in a depression right now and they are trying to avoid all these extra taxes and user fees and things that we don't really need. And we want to know in detail if we really have to pay these fees and find out exactly what they are and where they are going. That's why I'm asking these questions. EDGAR: I'll just respond that when you say we don't need it, when you say we've got tougher environmental laws today, those are inactive because in the minds of congress and the state legislature they are needed. And, we're just doing what we are mandated to do. Major Edward Stamford, 1002 Tropic Lane, Santa Ana I have a couple of questions here. I notice your breakdown sheet on the property code, type, reported fee and adopted fee and everything is pretty well laid out. How come it's not broken down into, I assume from what is said here there are about 40,000 hook-ups by the number of pieces you were going to mail out to the different people, why isn't that broken down to show us the total amount that you expect to get out of this for the year? Give us a full financial report. STREED: In the first year the total expected to be collected from user fees? $3.6 million is the total fee to be collected. The total operating requirements for the district in the next year would be $8.3 million. Did you say 2 was 4.? ~ STREED: I'm sorry. I don't understand that part of the question. Well, you've got all the codes here but you didn't break it down how much you were going to get from each one of these different ones. STREED: I'm sorry. That's not the question I responded to. I just answered the total fees to be received was $3.6 No, that's how you arrived at the total figure. STREED: Absolutely, sir. But I don't have that information in front of me tonight. I'd be happy to send it to you. Is your address on the form you turned in here? Yes, my name and address is on there. I'd like a copy of that. STREED: I'll be happy to send it you tomorrow, sir. Alright. And I noticed in here you write that the increased charges or lesser charges against the amount of water used against the discharge fee to the sewer. That one is way over my head. I don't know how you're going to measure anything like that. - EDGAR: Well, just kind of paraphrasing what Gary just said, the total cost this next fiscal year will be $8 million. We'll collect $3.5 million from this $40.00 user fee and we'll get the other $4.5 million from our share of the property tax. -3- Well, yeah. You're paraphrasing. But I'm thinking about these highrise buildings that are going in. EDGAR: Every highrise building has an equitable fee charge as well based on the number of square feet. I realize that but what about a man that has an acre of property or something, does a lot of watering on it or something and has very little discharge into the sewer system? EDGAR: Then there is no need to charge him a large sum if he doesn't discharge to the system. We are only talking about the treatment of the wastewater. You're only talking about the number of hook-ups. Okay SYLVESTER: Mr. Chairman, I'd like to conment on that last question. There is provision in the ordinance that if that type of a situation exists where you may have a large piece of property but very little wastewater going into the sewer system, if you will contact the District, we will review that matter with you and we do have the ability to adjust the fee accordingly. Now I never heard anything from the gentleman on the affect of Prop 62 on this user fee. I don't care what they call it. I think everyone that is on the tax rolls, whether you call it a user fee or whatever, it's a tax. And that's why it will be collected by the tax people for you. That's the only reason I can see why they take it. It's a tax and they turn it over to you. Whatever happened to the bond issues for improving the sewers and all? We still, county taxes are still broken down into county improvement tax or improvement bonds, repayment of them. STREED: If you would like me to answer the last part of that, I believe I could. Even when you sell bonds you have to repay those and you have to raise money to pay those, so that would come from user fees as well. As to if you have a question about Proposition 62, I'm sure that our counsel could answer that for you. Well, right now Howard Johnson Tax Association has a suit against Los Angeles County for utility fees for a percentage of the bills being paid. And I can't see any difference between this utility and those utilities. EDGAR: Well, I think that there is a very significant difference and it was a difference that was identified in Prop 13 when we voted to support that. Even in that proposition there was an acknowledgement that where you had a service that was directly related to a cost analysis that that was a fee that can and should be enacted. We have lots of documentation to show that we're not trying to build something because whatever is to be built is done with a different fund. This money of the $40.00 is only to process the wastewater. And because we have a direct mathematical proof of it costs this much to do it is apportioned to the people that are contributing. It's the fee within the strict definitions of Prop 13. Well, that's what I say. That there are people right now fighting under Prop 62 that they are all considered taxes and that's why they shouldn't be imposed without the taxpayers voting on it. That's Prop 62 and I don't see why we don't have a reason to vote on this. -4- EDGAR: Well, you see, one of the other constraints that we on the board have is that by being the elected board, we are responsible to make sure that the wastewater is treated in a healthy way. We can't contaminate the environment. We are not permitted to so we are obliged by our elected responsibility to protect the environment. Well, you are obliged also to act for the taxpayer. That's who pays you and gives the money to run your district. And we have passed a proposition that says we will vote on any taxes and this is just a political curve thrown at us to give it another name. I don't care what you call it. You collect money for it, it's a tax as long as it's being taken by a utility organization. And I think that very soon •••• the other thing I'd like to say is if this Prop 62 is strong enough and gets a court decision that we have to vote, will we come down and vote on this? Or will we be refunded the money we paid into it if it goes into effect? EDGAR: I don't know what court is going to tell us that we can ignore the environment. I don't think that is ever going to happen. Tom, can you respond to Prop 62? As a voter, I think we're being ignored. WOODRUFF: I'll try. There's been a series of questions and statements imposed here and it's a little difficult to sunmarize with a single answer. It goes back to Proposition 13 and, as the speaker has indicated, he thinks this is a tax. I think there have been a number of cases including some specifically ruled upon by the California Supreme Court regarding various charges or fees to pay for service. And I think perhaps the most meaningful comment in all those decision, and they are full of a lot of lawyer-like language, but one of the most persuasive cornnents that I have seen in any of those opinions was written by the Justice who wrote the opinion to the effect that just because the charge for the product is being made by a government, people have a tendency to think therefore it is a tax. If the charge was being made by Macy's or Bullock's or the Edison Company, you wouldn't equate it with a tax. When you go to buy water to run through your taps and take a shower, you certainly don't quarrel with the fact that you must pay for that. And the court ruled that when you finished using the water and put it down the pipe it could be handled by one of two types of entities, either some private company or a government agency. Simply because it is a government agency itself is not reason to say it's a tax. You are effectively buying a conmodity. The conmodity isn't something you can put in a bag and take home. It's a service. You saw on the video tonight it's a very sophisticated one billion dollar investment to preserve the beautiful marine environment that we have that we are privileged to live next to in the ocean. The Proposition 62 challenges have been totally unsuccessful to date. That's not to suggest that there may yet not be some decision that could effectively uphold portions of that. But those challenges that you have referenced in Los Angeles are considerably different than the challenge, if there were to be say a challenge to the charge that's being imposed for the service here tonight. I'm not personally aware and, believe me, I spend a lot of my time trying to follow these. I'm not personally aware of any pending challenges through the judicial system relative to sewer use charges. -5- Well, as a final word, I'll take it. The only thing I can say is you present your side and if you were good at it like the civilian companies are and all, you could convince us that we should increase the taxes and we would vote to increase the taxes to pay for it. Otherwise, we feel like we are being beat on with a ball bat. Everytime you turn around the politicians want to put some different name to it. And they are trying to change the meaning of words in the dictionary. The Russians went through this. They still use words that we think mean one thing and they known mean another in their place. And that's what it seems like we're getting to where we don't speak the same languages. That's my final word. Thank you. Evelyn Edna Dalby, 525 w. Main Street, Tustin Well, I've lived in Tustin since 1963 and now I'm collecting social security and my income is very limited. I don't understand why one person pays the same amount as a family or maybe two living in the same house as one. Can you explain that? STREED: That's the hardest question of any to answer and the only answer that I have for you is t~at we don't know how many people live in a house and we don't know how much water goes into the sewer. All we know are historical local averages of what kinds of property have what quantities of discharge into the system so we have been able to establish three building rates for three difference types of users. A small house pays the same fee as a large house. One person in the house pays the same fee as five or six people in the house. We do currently have a study underway to monitor actual sewer use in several areas and by several differenct types of development. When that study is completed, we will take to our directors another look at the user fee structure and see if there can be some other categories created perhaps that might make a difference in the amount of the fees and the way they are assessed. Well, it doesn't seem right that ••••• ! get my meals-on-wheels. I do a little cooking and I take my laundry out to do the laundry and I'm very conservative with a bath and the toilet facilities and I can't afford to pay that $40.00. And once you said that if your property was worth $100,000, that you'd have to pay more. Well there's not much property less than $100,000. So it would be $65 a year more or something. STREED: I know that's not a question but I may have left you with a false impression. It's not what your property is worth. It's what it is assessed at. So if you have been in your home since 1963, before Prop 13, you'd have that older assessed value. You're not assessed at market value like somebody who would move in next door to you today who would pay a much higher property tax as well as the user fee. So your portion, I don't know what your property is assessed at, but somebody in my office could help you with the parcel. Your total property tax bill may not be as much as some of the newer residents so your total fee would be less. I understand that but I don't understand this other. Why one person, there are probably a lot other ladies living alone, why they should have to pay as much as a family and some houses there are two families living in it. And most families have maybe 3 or 4 children, maybe 2, and there are baths to be given and it doesn't seem right to me. And I can't afford to pay it and I'm not going to pay \.._,/ it. I can't. You'll have to figure out something else. -6- EDGAR: I want to acknowledge that your point is very well taken and I can assure you that we are going to try to find a mechanism to do that. It's not easy to have something that complicated when you have 40,000 parcels to have variations of the type that you present. And yet I have to accept the fact that your point is very well taken Thank you. I want to know who to see outside of you folks. Who is this fellow here in Tustin that I could see and talk to? EDGAR: On sanitary sewers? On this issue. EDGAR: On this issue. Well, all of us, although, now I'm a city councilman in Tustin. Nevertheless my roll is a delegated one by the city council so •• So I can see you then? There are some other problems I want to see you about. Where are you located? EDGAR: You can call me at city hall. Frances P. Morrow, Space 9, 692 N. Adele Lane, Orange I, too, have the same situation that she has. I'm on social security, on a limited income and there is another aspect of the thing that interests me and that is we have a lot of building going on in this area. It seems to me that from the notification we received in the mail, all it referred to was the fact that the builders were going. to be responsible for the hook-ups of the new residences, but it also seems to me that if this is going to be an on-going cost for the treatment of the sewage that the people who live in these new homes and also the owners of homes already built in the district, should not have to bear the entire cost. It seems to me that the builders, themselves, should be assessed a certain amount. After all, they are the ones that are contributing to the problem in the first place by building. EDGAR: Now, let me make sure that as far as the building, the construction costs are all paid for by the fees that the builders pay. This $40 does not go to build anything. This goes to process the waste. The new structure, the new house, the new apartment, will have to pay the same fee because their sewerage has to be treated just like yours. So it is not something that's different for the new building. Well, what about the environmental impact reports? When they were done was this taken into consideration? When the builders were preparing to •••• ? EDGAR: Well, the environmental impact report would acknowledge the sewer treatment and they would. acknowledge the fact that the treatment plant was in place. But it would not: and it wouldn 1 t have to identify the cost of the treatment. It is merely to identify that the facilities were there and the facilities would be constructed to accorrrnodate the waste. But the cost of the chemicals, the cost of the processing, the cost of the energy to process, all of these costs are going up whether it's a new building or an old building. Well, it seems to me when they did this report they should have considered that as well as the developer's fees because that is an essential part of the whole problem. -7- Walter T. Sullens, 1712 La Loma Drive, Santa Ana Thank you for the opportunity to speak, Mr. Chairman and board. I wanted to express that I feel a certain unease about the concept of these user fees. Prop 13 certainly was a taxpayer revolt kind of approach to try and get a handle and slow down 11 government spending 11 • However, it certainly is predictable that with the Prop 13 increase of limit was about 1% or 2% and with inflation running about 6% then it doesn•t take much to figure out that sooner or later there is going to be a crunch. I 1 m rather prepared for it except that I wish we had some clearer formulas as to how these user fees will be charged to us. If it can be done with our sewers then when will it be done with the police department? And/or the fire departments? Would that be a user fee kind of a thing too? I bring this to your attention. I don•t know what the answer is but certainly with costs going up we can predict that it will cost us. I would challenge or charge the board, please, to be aware of these kinds of things and maybe come up with some creative ideas as to how we can control these. Thank you. -10- EDGAR: Well, I think all those things were considered in the environmental impact report. I think those are considered and the fact that there would not be equity if the new building had to pay more than their to process, let's say your sewerage. It's as fair as we know how to make it spread to everyone, the new building and the old building. And it is all in the environmental report. Well, it seems as though these developers are very, very careful in the way they operate. For instance, I understand that Vernet A-Line Company ?? is trying to get some sort of permission from the City of Orange to destroy all the apartments across the street from Albertson's on Prospect in Orange so that they can build condominiums because they don't expect they can sell the housing that is going up next door in the old quarry because they don't want to have the Mexicans there, ·they can't sell the housing. So I mean there are a lot of factors going on here and it has to do with the environment. I understand that quite well. But I also feel that it's very necessary for these reports to be very comprehensive and to see the impact upon the whole area. EDGAR: You would have been amazed to see the environmental reports that we have had for the entire county. It's not inches but feet thick because we have done a very thorough job of looking at every element of the environment. Well, that was my main point. That plus the fact that I will be adversely affected. Thank you. Franklin D. Cole, #3 Hutton Centre Drive, Suite 900, Santa Ana Good evening. I am repres~nting C.J. Segerstrom and Sons and Far West Management tonight. I want to read you a letter and then I'll give it to you. It concerns five different projects and properties: 1201 East Fairhaven, 3700 Santa Fe Village Drive, 3600 Aspen Village Way, 3301 South Bear, 1601 West MacArthur. C.J. Segerstrom is the owner/manager of those properties representing almost 1200 dwelling units. (Please see attached letters.) I have some tetters that cover each of the properties. A couple of other concerns that we have is not so much the dollar amount of the user fee as much as another couple of concerns that we have about the county collecting anything. And it isn't the county's fault. The county is a victim of something that is happening in Sacramento who is passed down to it. And from it down to us. When I say us I'm talking about the District. It could be a school district, it could be a city. Those costs, although established by a bill as far as some of these fees are concerned, I think we are deluding ourselves if we think they'll ever go down. They're going to go up. The fiasco in Sacramento at this point in time is greatly going to impact this county in this coming year. There will be other things passed to the county and it will be passed down to all of us, either cities, special districts, school districts, whatever you want to call yourselves. I 1 m not knocking the county. You know, I'll use another example that we have nothing to do with is this booking fee for jails. If anybody thinks that's going to disappear if Measure J passes, they don 1 t understand the complete impact of what's happening in Sacramento. A second and third thing we are concerned about is the cheapest way is not necessarily the best way. We think that there's another thing brewing and it is called regionalization and a year from now, or a year and one-half from now, I'm not sure you even know who you 1 re going to be answering.to. We think that individual bills to the users are something you should use to cornnunicate --- -8- We attended a SCAG meeting this past month. Orange County was not represented. But if you don't, all you have to do is sit there and listen to our state assembly people, our state senators and you begin to realize there is a big train headed our way and we have no real control of it. And I think the District, through its' utility bills to its' users, use that as a means to stay in touch with them and comnunicate to them as to what is going on, what's it about, what you're about. And we are talking about your survivability. Thank you very much. Dave Bryant, 1331 Bryan Avenue, Tustin My first question is that the 14 districts, does all the sewage from every district process through the same two plants? EDGAR: Yes Okay. The districts that have been paying user fees for anything up to almost 10 years, are those fees collected in the same manner by way of property tax or are· there different techniques in different districts? EDGAR: All the same. Well, then, my last question is how come District 7 has been so fortunate as to be the last district to have a fee assessed? EDGAR: Don't knock it. But there are several very simple engineering reasons. For example, the two districts that had the fee first were Districts 5 and 6 which include Newport Beach and Costa Mesa. And the level of the water table in those areas is significantly lower so every bit of sewerage from Districts ~ and 6 has to be pumped up so you have an energy cost that is added to that. So that is why they were first. Another significant fact is that there is a different mixture of the amount of comnercial and residential areas. I think District 7 has more conmercial/industrial in the entire area than the other districts. And all of the conmercial/industrial.areas for many years, maybe 20 years, have paid their charge directly as a function of what they do. So that if you have a plant building something somewhere, you've been pay1ng a user fee for a good number of years that is directly a function of how much material you discharge into the system. So that has been a factor to make it. Now are those the two major ones in your mind, Gary, or are there some others, Wayne? We're lucky that we're the last. SYLVESTER: I would just add one additional reason, Mr. Chairman. District 7 has been, in proportion to the other districts, has had more development in -recent years, that is since Proposition 13 has passed, and as a result they have had higher assess valuations as this new property has developed and have brought in more property taxes in proportion than the other districts. All of those things you mentioned plus that has helped District 7 be able to delay the implementation of the user fee. Thank you for what, to me, was a very clear presentation. I understand what the money is needed for and I understand why it is needed and thank all of you for coming out tonight in order to give us a chance to understand and to have our say. -9- COUNTY SANITATION DISTRICT NO. 7 OF ORANGE COUNTY, CALIFORNIA MINUTES OF ADJOURNED REGULAR MEETING April 18, 1991 -7:30 p.m. Tustin Presbyterian Church 225 West Main Street Tustin, California Pursuant to adjournment of the regular meeting of April 10, 1991, the Board of Directors of County Sanitation District No. 7 of Orange County, California, met in an adjourned regular meeting at the above hour and date. The Chairman called the meeting to order at 7:50 p.m. The roll was called and the Deputy Board Secretary reported that the Board lacked a quorum. DIRECTORS PRESENT: Richard B. Edgar, Chairman, John C. Cox, Jr., Robert Richardson (arrived at 8:27 p.m.), James A. Wahner DIRECTORS ABSENT: Fred Barrera, Don R. Roth, Sally Anne Sheridan STAFF MEMBERS PRESENT: J. Wayne Sylvester, General Manager, Thomas M. Dawes, Gary G. Streed, Penny Kyle, Corinne Clawson, Jeff Esber, Dan Dillon, Bob Geggie, Judy Lee OTHERS PRESENT: Thomas L. Woodruff, General Counsel, Franklin D. Cole, Frank Costantino, Edward P. Stamford, Ben Lovelace, Bing Ng, Mr. and Mrs. Robert G. William, Dr. and Mrs. Sylvan Katz, Al Baker, Hilary Baker, M. A. Marchese, Evelyn Edna Dalby, Frances P. Morrow, Walter T. Sullens, E. Rhoades, Dave Bryant * * * * * * * * * * * * * * * * * * Video Presentation on Districts• Wastewater Management Program The Chairman stated that a Board quorum was expected shortly. He observed that since many of the citizens in attendance had not had an opportunity to acquaint themselves with the activities of the Sanitation District, while awaiting a quorum he would open the meeting by showing a video ~n the District's wastewater management program. Declaring a Quorum Present quorum present. Public Hearing on proposal to collect adopted annual sewer service charges on the property tax bills and on the Sewer Service Charge Report for 1991-92 Open Public Hearing Upon the arrival of Director Richardson at 8:27 p.m. the Chairman declared a The Chairman declared the hearing open at 8:27 p.m. He then announced that the purpose of the public hearing was to consider a written report pertaining to the providing of sewer service for all properties within the District, and the proposal to collect the adopted sewer use fee on the property tax roll beginning with the 1991-92 fiscal year. DISTRICT 7 4/18/91 Staff Report on proposed use of the County of Orange property tax bill for collection of the annual sewer service charge The General Manager stated that the County Sanitation District is responsible for transporting, treating and disposing of sewage in a safe manner in accordance with strict federal and state laws to protect the public health and safety and the environment. In order to do so it had been necessary for the Board to implement a user fee to provide adequate funding for District's activities because of tax revenue limitations. He observed that the purpose of this hearing was not to consider any new fee or any change of an existing fee, but, rather, the method of collecting the already adopted sewer use fee that will take effect on July 1, 1991. He then introduced Gary Streed, the Director of Finance, who reviewed the staff's reports on District No. 7's financial plan, sunmarized as follows: The Orange County Sanitation Districts' cost of providing sewerage service to the conmunity has been escalating rapidly because of the increasingly stringent federal and state laws and regulations requiring advanced treatment of wastewater to remove toxic materials and other pollutants from the sewage to assure protection of the public health and safety and the environment. To comply with the new stricter requirements, the Joint Sanitation Districts have constructed sophisticated treatment facilities at a cost of hundreds of millions of dollars over the past few years. In fiscal year 1992-93, without appropriate measures to protect the District's financial integrity, property tax revenues and other existing revenues were projected to be insufficient to meet the District's funding requirements. Due to insufficient tax revenues, by the end of 1992-93 the projected shortfall to meet the District's operating expenses and maintain the solvency of the fund would have reached $2.9 million, increasing to $21.6 million by the year 2000. Therefore, after considerable study of the District's long-range funding requirements, the Board adopted a financial program to avoid projected revenue shortfalls ~nd provide the necessary income required to finance the District's rising operating expenses, as well as major capital expenditures for construction of master-planned sewerage facilities. The Board's adopted financial program includes a one-time connection fee of $2,350 per dwelling unit for residential property and a $470 per 1,000 sq. ft. charge for conmercial, industrial and governmental property. The connection fee is used to pay for expansion of capital facilities to serve new development. As the second element of the long-range financial program, to pay for costs of operating, maintaining and rehabilitating the sewerage system, the Board adopted annual sewer service fees, as follows: Type of Property -Single-family Residence -Multi-family Residence/Mobile Home -Conmercial/Industrial/Other (government buildings, utilities, non-profit organizations, etc.) -2- Annual Fee $40.00 24.00 28.60/1,000 sq. ft. \ •• v v DISTRICT 7 ·. 4/18/91 ·~ The Director of Finance noted that the large conmercial or industrial dischargers that place an inordinant demand on the District's system are also subject to an additional surcharge under a separate industrial waste ordinance that has been in effect since 1976. Some large industrial industrial dischargers pay as much as $122,056 per year under this program. The Director of Finance, utilizing a slide presentation, sunmarized the District's organizational make-up and their wastewater management program. He also reviewed the following three billing and collection alternatives that had been identified and evaluated by the staff: -Direct Billing and Collection by District This approach would require the Sanitation District to send a direct bill on a periodic basis to every property owner within the District. The one-time setup cost for this method is estimated at $157,100 plus an annual cost of $92,100, making the total cost for the first year $249,200. The projected five-year cost for the direct billing alternative would be $617,600. -Placement of User Fee on Local Water Service Bills for Collection and Remittance to District Under this method the sewer service charge would be included as a separate line item on the bill of the several water utilities that serve the properties within District No. 7. He noted that a major problem of this method is that with the numerous water purveyors involved it would be difficult to establish a uniform system, which adds significantly to the cost; and the reluctance of the water utilities to become the billing agent. The setup cost for this alternative would be $157,100 plus an annual cost of $232,500, for a total cost for the first year of $389,600. The estimated five-year cost of performing this billing service is $1,319,600. -Placement of User Fee on County of Orange Property Tax Bill for Collection and Remittance to District Under this alternative the sewer service charge would be included as a separate line item on the property tax bills for all properties within District No. 7. The setup cost would be $142,600. The annual cost of billing under this method is only $11,700. The total first-year cost would be $154,300 and the five-year cost is estimated to be $201,100. Mr. Streed observed that this method would save the property owner both directly because of significantly lower costs to the District, and indirectly because the cost of making periodic payments by the property owner would be reduced. Staff reconmended this alternative as it is clearly the most cost-effective billing and collection method available. Districts 1, 2, 3, 5, 6, 11 and 13 have already adopted this method for billing their user fees, and it has proven quite effective in keeping the administrative costs for billing and collecting fees under control in these seven Districts. -3- DISTRICT 7 4/18/91 The Director of Finance reiterated that the rising costs to operate the District are due to higher mandated levels of treatment and increased energy costs. The long-range financial program was adopted by the District because the District's revenues and reserves were decreasing and soon the District would not have been able to meet its operational requirements without an additional revenue source. Mr. Streed then observed that although many of the issues posed by the public were not really relevant to the specific purpose of the hear1ng, he recognized that the citizens have a genuine interest in the activities of the Sanitation Districts and he, therefore, sunmarized responses to those questions that had been raised thus far in the workshop held by the Districts' staff and in telephone inquiries. He explained the role of the District as an operating utility providing an essential service necessary for the protection of the public health and safety, and indicated that the District was established solely to provide wastewater collection, treatment and disposal services to the conmunity. The Director of Finance further explained that while the District has always had the statutory authority to levy a sewer service fee, it had historically financed its operations, maintenance and rehabilitation activities from the property tax. The adopted sewer service charge is based upon use, thus, he reported, it is not a tax and is not subject to Proposition 13 and 62 provisions. Property taxes are based on the value of the property and have no direct relationship to use. Mr. Streed reiterated that the reason for the proposal to collect this fee on the tax bill is because it is the most cost-effective method, and has no bearing on whether it is defined as a tax or a fee. Mr. Streed also reiterated the impact of evolving federal and state regulatory requirements on the District's activities and costs, the cost reduction measures implemented by the Districts, the basis of the fee structure for varioos purposes and for the various classes of users and the statutory provisions under which the fees were adopted, and then reviewed cash flow projections. The reduction in tax revenues resulting from the passage of Proposition 13 and its implementing legislation, combined with the higher energy costs, the effects of inflation over the past several years, and more stringent treatment requirements mandated by federal, state and local regulatory agencies, would result 1n depleting reserves and projected operating deficits for the District without the new fees. · The Director of Finance then highlighted the appeal process available to allow for an adjustment of fees in the event of a demonstrated inequity. Appeals relative to inaccurate billings or properties that are not connected to local sewers are handled on a case-by-case basis. The General Manager then reiterated that the purpose of the hearing was to receive public conmentary on the District's proposal to collect the annual service charge on the property tax bill. He also advised that official notice of the hearing was mailed during the latter part of February and early March to 41,165 property owners of record on the last equalized assessment roll of the County of Orange, in accordance with the I v provisions of Section 5473.1 of the California Health and Safety Code. ~ -4- DISTRICT 7 04/18/91 As prescribed by law, a legal notice of the hearing was published in the Orange County Register on April 1, 1991 and again on April 8, 1991. The hearing notice included the District's telephone number for citizens to call with questions or for more information. The staff received approximately 39 calls. Staff also conducted a workshop to answer questions about the proposal and the District's operations. The workshop was held at 7:30 p.m. on Thursday, March 21, at the Tustin Presbyterian Church, and ten people attended. Receive and file Sewer Service Moved, seconded and duly carried: Charge Report for Fiscal Year 1991-92 That the County Sanitation.District No. 7 Sewer Service Charge Report for Fiscal Year 1991-92 be, and is hereby, received and ordered filed. Receive and file written conments The General Manager reported that 34 written conmunications had been received regarding the sewer service fee and proposed method of collection and sunmarized the conments; whereupon, It was moved, seconded and duly carried: That the written conmunications received from the property owners listed on "Attachment 111 to these minutes, be, and are hereby, received and ordered filed. Oral Public Conments Chairman Edgar recognized the following persons who addressed the Board regarding the proposed method for billing and collection of the annual sewer service charge: -Lorane Katz, 12202 Redhill Avenue, Santa Ana Ms. Katz questioned the basis for computing the single-family dwelling charge. She indicated that she had heard it may be based on front footage or square footage. In response, the Chairman advised that the charges for residential dwellings were a per-dwelling unit charge. Charges for conmercial and industrial property are based on square footage. Ms. Katz also requested information on how sewer services were financed in District 13; and the difference between projected fees and actual fees in District 7. The Director of Finance reviewed the fee and tax structure of District 13 and the data used to calculate projected and actual user fees in District 7. -Frank Costantino, 534 N. Thomas Street, Orange Mr. Costantino asked whether a private engineering firm had inspected the Districts• facilities and determined the need for new facilities which led to the District implementing the sewer service fees to pay for these facilites. He questioned whether these fees couldn't be delayed for several years. He also asked for information on the code section(s) that allow implementation of the fees. -5- DISTRICT 7 4/18/91 In response, the Chairman reported that need for new facilities is due ~ to the District's increased demand for wastewater treatment service, as well as the more stringent requirements for higher levels of treatment mandated by the state and federal regulatory agencies. He noted that ~. ) the Districts' facilities were extremely sophisticated and cost ~ efficient, and, in fact, are master planned based on studies by consulting engineering firms. The District's portion of the tax revenue received will not meet the financial needs of the District in order to operate the facilities. Staff also responded to his question regarding the exact code section which allows the Districts to establish these fees. Section 5473.1 of the Health and Safety Code empowers the District to establish user charges and Section 5471 provides for the method of collecting the charge on the property tax bill. -Major Edward Stamford, 1002 Tropic Lane, Santa Ana Major Stamford requested information regarding the total annual dollar amount that would be raised by each type of charge and the breakdown of the District's expenses and the equitability of the fee. Staff responded that the total amount·expected to be collected from user fees in the first year was $3.6 million. The total operating requirements for this year are projected to be $8.3 million. A breakdown by category of user was not available but staff indicated it would be mailed .to Major Stamford. Staff also reviewed how various types of properties are charged to achieve equity and the procedures . for fee adjustments if actual sewer use is less than the property use might otherwise indicate. .r· Major Stamford also expressed his view that these charges were actually ~ taxes and should not be allowed according to Proposition 62. It was pointed out that the user fees are based on the actual cost to treat the wastewater and those costs are being apportioned to the appropriate user. It is not a tax and was established in accordance with prov.isions of the Health and Safety Code and under the strict definitions of Proposition 13. -Evelyn Edna Dalby, 525 w. Main Street, Tustin Ms. Dalby questioned the equity of the fee structure because of different household occupancies. She objected to being charged the same for her residence with only one person as another residence with a family and several children. Chairman Edgar and Mr. Streed reiterated the basics of calculating fees to attempt to achieve equity. -Frances P. Morrow, Space 9, 692 N. Adele Lane, Orange· Ms. Morrow also questioned the equity of the fee structure. She stated her belief that the developers of new residential property should be responsible for paying these fees. She also questioned whether environmental impact reports completed for new construction addressed the proposed user fees. In response, the Chairman advised that developers pay a separate, additional fee for sewage facilities to serve new development and that environmental impact reports would acknowledge whether sewage treatment facilites were in place. -6- -~ ... v ;. DISTRICT 7 ~ 4/18/91 -Franklin D. Cole, #3 Hutton Centre Drive, Suite 900, Santa Ana Mr. Cole stated that he was representing c. J. Segerstrom Sons and Far West Management. He read a letter relative to five different properties and projects. Mr. Cole expressed concern relative to these charges being collected by the County on the tax bill. He also conmented that the cheapest way is not necessarily the best way. It was suggested that the direct billing method should be used instead of placing this charge on the tax bills. Mr. Cole submitted letters to the Secretary as part of the record. -Dave Bryant, 1331 Bryan Avenue, Tustin Mr. Bryant questioned whether the other Sanitation Districts used the same method to collect their user fees and why District 7 was the last District to implement these charges. In response, the Chairman and staff pointed out that all of the other Districts a 1 so use the property tax bi 11 to collect their sewer service charges. District 7 has not had to implement these charges until now because they have had more development in recent years since Proposition 13 passed, which resulted in higher assessed valuations as the new property developed which, therefore, increased the amount of revenue received from property taxes. Also, some of the other Districts have higher operating costs due to the necessity to pump their wastewater from lower areas, such as Newport Beach and Costa Mesa. Several factors have allowed District 7 to delay implementation of the user fee until now. -Walter T. Sullens, 1712 La Loma Drive, Santa Ana Mr. Sullens expressed his concern that other agencies would also be implementing user fees or service fees, such as the police and fire departments. He cautioned the District's Board to be aware of increased government spending and urged them to try to develop ideas to control costs and prevent implementation of additional charges being placed on the taxpayers by other governmental agencies. Close hearing There being no further public conments, the Chairman then declared the hearing closed at 9:07 p.m. Adopting a finding that the .majority of property owners have not protested relative to collecting annual sewer service charges on the property tax bills Moved, seconded and duly carried: That the Board of Directors does hereby find that a majority of the owners of the property, which is the subject of the Sewer Service Charge Report for Fiscal Year 1991-92, have not protested the proposed collection of annual sewer service charges on the property tax bills. Moved, seconded and duly carried: Adoption of Sewer Service Charge Report for Fiscal Year 1991-92 That the County ·sanitation District No. 7 Sewer Service Charge Report for Fiscal year 1991-92 be, and is hereby, adopted. -7- DISTRICT 7 4/18/91 Directing the County Auditor- Controller to include sewer service charges on property tax bills beginning in 1991-92 Moved, seconded and duly carried: That the Board of Directors hereby adopts Resolution No. 91-64-7, directing the County Auditor-Controller to include sewer service charges on property tax bills beginning in fiscal year 1991-92 for collection, pursuant to Ordinance No. 725 of County Sanitation District No. 7 of Orange County. Said resolution, by reference hereto, is hereby made a part of these minutes. Adjournment Moved, seconded and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 7 be adjourned. The Chairman then declared the meeting so adjourned at 9:08 p.m., April 18, 1991. ~ ,...,---Secretary; Bo~ of Directors County Sanitation District No. 7 of Orange County, California -8- .-. 'V· "° ' ' ,.,,-. ~ ~ COUNTY SANITATION DISTRICTS of ORANGE COUNTY. ·CALIFORNIA DISl'R!Cl' 7 PROPOSAL 'ID COLLECT' USER FEE ON PROPERl'Y TAX BIIL 10844 ELLIS AVENUE P.O. BOX 8127 FOUNTAIN VALLEY. CALIFORNIA 92729-8127 (7141 962-2411 Smnnary of Written Ccmtents Received Through April 10, 1991 I. Should Not be on Property Tax Bill: John Rau 2017 Centella Pl. Newport Beach, CA 92660 II. Properties Not Connected to Sewer: Jane Vaughn 2052 Ia CUesta Dr. Santa Ana Bernard c. Mallard 1432 Cameo Dr. Tustin Quentin P. Johnson TR 17621 Fiesta Way Tustin Floyd E. CUrl 1411 Lance Dr. Tustin Wanda O'Dell 17341 ~adden Tustin Western Hane Financing Cmp 10530 Brier Ln. Santa Ana Albert J. stefan 10472 Broadview Pl. Santa Ana IRVINE TUSTIN Thanas L. Gunkel, II 11242 Ia Vereda Dr. Santa Ana w. Donald Baeanan 1681 Mitchell Ave. Tustin Junior L. Janes 150 S. Pacific st. Tustin Robert M. Phillips 17662 Westbm:y Ln. Tustin Patricia M. Riddle 14031 Woodlawn Ave. Tustin Richard L. Crawford 14172 Clarissa Ln. Santa Ana Metropolitan Waste 16381 Construction w er. Irvine "ATTACHMENT 1" Page 2 II. Properties not Connected to Sewer (Cont' dl • UNnmRPORAT.ED AREAS CCont 'd. l Daniel J. Hannes 13772 N. Deodar St. Santa Ana Themas E. King TR 13871 Deodar st. Santa Ana Eugene B. Erbentraut 13911 N. Decdar st. Santa Ana Alvin R. Pauck TR 13922 N. Deodar st. Santa Ana Robert F. Cole 12952 Elizabeth Way Tustin Ralph c. Anderson 19131 E. F.questrian Ln. Orange Dan w. Townley 12451 Eveningside Dr. Santa Ana IaJ.is F. Lyon TR 18231 E. 'Fairhaven Ave. Santa Ana Ronald P. Fialcowitz 10391 Greenbrier Rd. Santa Ana Robert E. casey 'IR 3 Ia Rama Dr. Santa Ana REF:2/Dist7.Lst Jack M. Hollander TR 13531 Malena Dr. Tustin Gregorio Aguirre, Jr. 13812 Pasadena Ave. Santa Ana Belford L. Phillips 12652 Prospect Ave. Santa Ana Wiley C. Raulston TR 1762 Sier.ta Alta Dr. Santa Ana Dayton o. Dargatz 19102 E. Smiley Dr. Orange Ray M. Ball 1031 SIJDke Tree Ln. Santa.Ana Victor B. Bertagna TR 1112 st. John Pl. Santa Ana Rollo S. Pickford 1111 St. Vincent Pl. Santa Ana E. W. Bmnlin 1221 Triuuphal. Way Santa Ana EXCERPT FROM THE MINUTES OF THE REGULAR JOINT MEETING OF THE BOARDS OF DIRECTORS OF COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA A regular joint meeting of the Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, was held at the hour of 7:30 p.m., April 10, 1991, at 10844 Ellis Avenue, Fountain Valley, California. The Chairman of the Joint Administrative Organization called the meeting to order at 7:30 p.m. The roll was called and the Secretary reported a quorum present. * * * * * * * * * * * * * * * * DISTRICT 7 Moved, seconded and duly carried: Adjournment That this meeting of the Board of Directors of County Sanitation District No. 7 be adjourned to Thursday, April 18, 1991, at 7:30 p.m., at the Tustin Presbyterian Church, 225 West Main Street, Tustin, for a public hearing pursuant to California Health and Safety Code Section 5473.1, for the purpose of reviewing written reports pertaining to the provision of sewer service for all properties within County Sanitation District No. 7, and to consider public conments regarding use of the County of Orange property tax roll for billing of District sewer service charges for sewer collection, treatment and disposal services, conmencing with the fiscal year beginning July 1, 1991. The Chairman then declared the meeting so adjourned at 9:29 p.m., April 10, 1991. STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) I, RITA J. BROWN, Secretary of each of the Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, do hereby certify that the above and foregoing to be a full, true and correct copy of minute entries of the meeting of said Boards of Directors on the 10th day of April, 1991. IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of April, 1991. ~er~ Secretary of the Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, I hereby certify that the Agenda for the Adjourned Regular Board Meeting of District No. -1_ held on ~ \ j , 19~ was duly posted for public inspection at the main lobby of the District's offices on ~ \' , 19~. IN WITNESS WHEREOF, I have hereunto set my hand this \\~ day of~ , 19q\. Q·~.,_~~ Rita J. BrowrilSecretary of the Board of Directors of County Sanitation District No. -1...:_ of Orange County, California